Filed pursuant to Rule 253(g)(2)
OFFERING CIRCULAR DATED March 5, 2021
Nouslogic Healthcare, Inc.
Nouslogic Healthcare, Inc. is offering to sell 135,000 Common Stock Shares at an aggregate selling price of $40.74 Per Share offered on a best efforts basis with a minimum funding amount of $700,000.
March 5, 2021
5150 Crenshaw Road #A150
Pasadena, Texas 77505
269-369-1788
https://www.nouslogichc.com/about
Up to 135,000 shares of Common Stock at $40.74 per share sold by a selling shareholder
| Price to public | Underwriting discount and commissions | Proceeds to issuer | Proceeds to other persons | ||||||||||||
| Per share each: | $ | 40.74 | $ | 2.85 | $ | 37.89 | None | ||||||||
| Total | |||||||||||||||
| Minimum | $ | 700,000 | $ | 49,000 | $ | 651,000 | None | ||||||||
| Total | |||||||||||||||
| Maximum | $ | 5,500,000 | $ | 385,000 | $ | 5,115,000 | None | ||||||||
*US Capital Global Securities (“the Placement Agent”) shall be issued 3.5% of common stock in the form of warrants on a pro-rate basis as well as 7% in success fees
This Offering will terminate at the earlier of: (a) the date upon which the escrow agent confirms that it has received in escrow account gross proceeds of $5,500,000 in deposited funds; (b) March 5, 2022; or (c) the date upon which a determination is made by the company and the Placement Agent to terminate the Offering. This Offering is being conducted on a best-efforts basis with a minimum target of $700,000. The Company’s escrow agent will hold funds that are tendered by investors, and will re-disburse funds to investors if the minimum is not met.
THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION DOES NOT PASS UPON THE MERITS OR GIVE ITS APPROVAL OF ANY SECURITIES OFFERED OR THE TERMS OF THE OFFERING, NOR DOES IT PASS UPON THE ACCURACY OR COMPLETENESS OF ANY OFFERING CIRCULAR OR OTHER SOLICITATION MATERIALS. THESE SECURITIES ARE OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED ARE EXEMPT FROM REGISTRATION
GENERALLY, NO SALE MAY BE MADE TO YOU IN THIS OFFERING IF THE AGGREGATE PURCHASE PRICE YOU PAY IS MORE THAN 10% OF THE GREATER OF YOUR ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE 251(d)(2)(i)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE ENCOURAGE YOU TO REFER TO www.investor.gov.
This offering is inherently risky. See “Risk Factors” on page 3-7.
Sales of these securities will commence on or about March 5, 2021 .
THIS DOCUMENT SHOULD BE READ IN CONJUNTION WITH THE FORM 1A, AS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION . THE FORM 1A CAN BE OBTAINED AT https://sec.report/Form/1-A.
The company is following the “Offering Circular” format of disclosure under Regulation A.
Table of Contents
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Page 2 of 47
Investing in shares of Nouslogic Healthcare, Inc. (the “Company”) is very risky. You should be able to bear a complete loss of your investment. You should carefully consider the following factors, including those listed in the accompanying business plan. See Risk Factors Section to more details.
The Company commenced operations in April 2015 and is organized as an ‘C’ Corporation under the laws of the State of Delaware. Accordingly, the Company has only a limited history upon which an evaluation of its prospects and future performance can be made. The Company’s proposed operations are subject to all business risks associated with new enterprises. The likelihood of the Company’s success must be considered in light of the problems, expenses, difficulties, complications, and delays frequently encountered in connection with the expansion of a business, operation in a competitive industry, and the continued development of advertising, promotions and a corresponding customer base. There is a possibility that the Company could sustain losses in the future. There can be no assurances that Nouslogic Healthcare, Inc. will even operate profitably.
Gross offering proceeds from the offering (the “Offering”) of a minimum of $2,500,000 and a maximum of $ $5,500,000 may be realized. Management believes that such proceeds will capitalize and sustain the Company sufficiently to allow for the implementation of the Company’s Business Plans. If only a fraction of this Offering is sold, or if certain assumptions contained in Management’s business plans prove to be incorrect, the Company may have inadequate funds to fully develop its business and may need debt financing or other capital investment to fully implement the Company’s business plans.
In the early stages of development the Company’s business will be significantly dependent on the Company’s management team. The Company’s success will be particularly dependent upon: Hoang H Nhu, and Vu Doan Theriot, MD. The loss of any one of these individuals could have a material adverse effect on the Company. See “MANAGEMENT” section.
Risks Associated with Expansion
The Company plans on expanding its business through the introduction of a sophisticated marketing campaign. Any expansion of operations the Company may undertake will entail risks. Such actions may involve specific operational activities, which may negatively impact the profitability of the Company. Consequently, shareholders must assume the risk that (i) such expansion may ultimately involve expenditures of funds beyond the resources available to the Company at that time, and (ii) management of such expanded operations may divert Management’s attention and resources away from its existing operations, all of which factors may have a material adverse effect on the Company’s present and prospective business activities.
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Page 3 of 47
Customer Base and Market Acceptance
While the Company believes it can develop a customer base through marketing to hospitals and the food preparation industry, the inability of the Company to develop such a customer base could have a material adverse effect on the Company. Although the Company believes that its products are unique over competitive products, no assurance can be given that the Company’s products will attain a degree of market acceptance on a sustained basis or that it will generate revenues sufficient for sustained profitable operations.
While there are other companies with hand hygiene tracking systems, Management believes that the Company’s system based on the latest Bluetooth Low Energy Technology is much more cost effective, and does not require installation modification. However, there is the possibility that new competitors can in the future produce competing products. Likewise, these new competitors could be better capitalized than the Company which could give them a significant advantage. There is the possibility that the competitors could capture significant market share of the Company’s intended market.
If the Company incurs indebtedness, a portion of its cash flow will have to be dedicated to the payment of principal and interest on such indebtedness. Typical loan agreements also might contain restrictive covenants, which may impair the Company’s operating flexibility. Such loan agreements would also provide for default under certain circumstances, such as failure to meet certain financial covenants. A default under a loan agreement could result in the loan becoming immediately due and payable and, if unpaid, a judgment in favor of such lender which would be senior to the rights of shareholders of the Company. A judgment creditor would have the right to foreclose on any of the Company’s assets resulting in a material adverse effect on the Company’s business, operating results or financial condition.
Unanticipated Obstacles to Execution of the Business
The Company’s business plans may change significantly. Many of the Company’s potential business endeavors are capital intensive and may be subject to statutory or regulatory requirements. Management believes that the Company’s chosen activities and strategies are achievable in light of current economic and legal conditions with the skills, background, and knowledge of the Company’s principals and advisors. Management reserves the right to make significant modifications to the Company’s stated strategies depending on future events.
Management Discretion as to Use of Proceeds
The net proceeds from this Offering will be used for the purposes described under “Use of Proceeds.” The Company reserves the right to use the funds obtained from this Offering for other similar purposes not presently contemplated which it deems to be in the best interests of the Company and its shareholders in order to address changed circumstances or opportunities. As a result of the foregoing, the success of the Company will be substantially dependent upon the discretion and judgment of Management with respect to application and allocation of the net proceeds of this Offering. Investors for the Shares offered hereby will be entrusting their funds to the Company’s Management, upon whose judgment and discretion the investors must depend.
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Page 4 of 47
As of August 1st, 2016 the Company’s Directors and Executive Officers owned approximately 94.15% of the Company’s outstanding Shares. Upon completion of this Offering, the Company’s Directors and Executive Officers will own approximately 84.2% of then issued and outstanding Shares, and will be able to continue to control Nouslogic Healthcare, Inc. Investor shareholders will own a minority percentage of the Company and will have minority voting rights. Investors will not have the ability to control either a vote of the Company’s Directors and Executive Officers. See “MANAGEMENT” section.
The Company intends to retain any initial future earnings to fund operations and expand the Company’s business. The Company, therefore, does not anticipate declaring any dividends in the foreseeable future. A shareholder will be entitled to receive revenue profits proportionate to the amount of Shares held by that shareholder if and when the Company’s Management determines a profit distribution plan based upon the Company’s results of operations, financial condition, capital requirements, and other circumstances. See “DESCRIPTION OF SECURITIES” section.
No Assurances of Protection for Proprietary Rights; Reliance on Trade Secrets
In certain cases, the Company may rely on trade secrets to protect intellectual property, proprietary technology and processes, which the Company has acquired, developed or may develop in the future. There can be no assurances that secrecy obligations will be honored or that others will not independently develop similar or superior products or technology. The protection of intellectual property and/or proprietary technology through claims of trade secret status has been the subject of increasing claims and litigation by various companies both in order to protect proprietary rights as well as for competitive reasons even where proprietary claims are unsubstantiated. The prosecution of proprietary claims or the defense of such claims is costly and uncertain given the uncertainty and rapid development of the principles of law pertaining to this area. The Company, in common with other firms, may also be subject to claims by other parties with regard to the use of intellectual property, technology information and data, which may be deemed proprietary to others.
Limited Transferability and Liquidity
To satisfy the requirements of certain exemptions from registration under the Act, and to conform with applicable state securities laws, each investor must acquire his Shares for investment purposes only and not with a view towards distribution. Consequently, certain conditions of the Act may need to be satisfied prior to any sale, transfer, or other disposition of the Shares. Some of these conditions may include a minimum holding period, availability of certain reports, including financial statements from the Company’s limitations on the percentage of Shares sold and the manner in which they are sold. The Company can prohibit any sale, transfer or disposition unless it receives an opinion of counsel provided at the holder’s expense, in a form satisfactory to the Company, stating that the proposed sale, transfer or other disposition will not result in a violation of applicable federal or state securities laws and regulations. No public market exists for the Shares and no market is expected to develop. Consequently, owners of the Shares may have to hold their investment indefinitely and may not be able to liquidate their investments in the Company or pledge them as collateral for a loan in the event of an emergency.
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Page 5 of 47
Broker - Dealer Sales of Shares
The Company’s Common Stock Shares are not presently included for trading on any exchange, and there can be no assurances that the Company will ultimately be registered on any exchange. The NASDAQ Stock Market, Inc. has recently enacted certain changes to the entry and maintenance criteria for listing eligibility on the NASDAQ SmallCap Market. The entry standards require at least $4 million in net tangible assets or $750,000 net income in two of the last three years. The proposed entry standards would also require a public float of at least $1 million shares, $5 million value of public float, a minimum bid price of $2.00 per share, at least three market makers, and at least 300 shareholders. The maintenance standards (as opposed to entry standards) require at least $2 million in net tangible assets or $500,000 in net income in two of the last three years, a public float of at least 500,000 shares, a $1 million market value of public float, a minimum bid price of $1.00 per share, at least two market makers, and at least 300 shareholders.
No assurance can be given that the Common Stock Share of the Company will ever qualify for inclusion on the NASDAQ System or any other trading market until such time as the Management deem it necessary. As a result, the Company’s Common Stock Shares are covered by a Securities and Exchange Commission rule that opposes additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors. For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser’s written agreement to the transaction prior to the sale. Consequently, the rule may affect the ability of broker-dealers to sell the Company’s securities and will also affect the ability of shareholders to sell their Shares in the secondary market.
Long Term Nature of Investment
An investment in the Company may be long term and illiquid. As discussed above, the offer and sale of the Shares will not be registered under the Act or any foreign or state securities laws by reason of exemptions from such registration, which depends in part on the investment intent of the investors. Prospective investors will be required to represent in writing that they are purchasing the Shares for their own account for long-term investment and not with a view towards resale or distribution. Accordingly, purchasers of Shares must be willing and able to bear the economic risk of their investment for an indefinite period of time. It is likely that investors will not be able to liquidate their investment in the event of an emergency.
There is no current market for the Shares offered in this private Offering and no market is expected to develop in the near future.
Compliance with Securities Laws
The Shares are being offered for sale in reliance upon certain exemptions from the registration requirements of the Securities Act, applicable Texas Securities Laws, and other applicable state securities laws. If the sale of Shares were to fail to qualify for these exemptions, purchasers may seek rescission of their purchases of Shares. If a number of purchasers were to obtain rescission, the Company would face significant financial demands, which could adversely affect the Company as a whole, as well as any non-rescinding purchasers.
The price of the Shares offered has been arbitrarily established by the Company, considering such matters as the state of the Company’s business development and the general condition of the industry in which it operates. The Offering price bears little relationship to the assets, net worth, or any other objective criteria of value applicable to the Company.
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Page 6 of 47
At the present time, two individuals are actively involved in the management of the Company. The Directors and Executive Officers are:
| ● | Hoang H Nhu – CEO & Founder |
| ● | Vu Doan Theriot, MD – President & Cofounder |
Hoang H Nhu – CEO & Founder
Thirty years of hands-on experience in state-of-the-art product innovation and development of digital signal processing algorithms, SoC System-on-Chip architecture/design, wireless, mobile HW/SW application platform, and emerging technologies. Continuous proven track record in taking innovative products from ideas to development, mass production and market commercialization. Result-driven leadership and proven ability to work with a small team as well as manage team of 100s. Strong hands-on technical background with 11 issued patents and 6 pending patents.
Experience
Technologist, System Architect, SoC ASIC Chip Lead, Inventor, Entrepreneur
HP, Broadcom, DeviceLab, KoolTechs Inc
CEO and Founder
KoolTechs Inc
2013 – Present
NousLogic Inc.
2014 – Present
NousLogic Healthcare
2014 - Present
DeviceLab Inc.
2013 – 2014
| ● | Manage a HW/FW/SW team to architect and develop a cloud-based embedded system platform that interfaces with iOS/Android smart wireless “appcessories” (app + accessories) for health/fitness/medical devices |
SoC ASIC Chip Lead
Broadcom
2000 – 2013 (13 years)
| ● | Developed
audio/graphic/video signal processing algorithms; prototyped them in FPGA hardware, and
designed in SoC System on Chip ASIC for high-volume production Led a large team of multi-sites EE ASIC designers worldwide to produce many VLSI SoC from concept, to architecture, design, verification, fab, production and QA test. These VLSI multi-cores chips are used as main SoC in digital TV’s, digital Set-top boxes, and communications platforms by leading consumer and communications operator manufacturers. |
SoC ASIC Chip lead
Hewlett Packard (Home Imaging Division)
January 1994 – September 2000 (6 years 9 months)
| ● | Architected, designed and managed HP’s first low-cost home-imaging copier SoC System-on-Chip from concept to mass production. |
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Page 7 of 47
| ● | Led a team of SoC System-on-Chip EE designers in the design and mass production of HP’s pioneering PhotoSmart home-imaging printer/scanner/digital camera. HP PhotoSmart product launch marked the arrival of the digital photography era. | |
| ● | EE Manager in the most profitable division of HP: architected and developed the next-generation test system to test each HP inkjet cartridge as it comes out of the high-volume production line. |
System Engineer
Applied Signal Technology
January 1992 – January 1994 (2 years 1 month)
| ● | Developed SW/FW signal processing algorithms and Hardware board/FPGA design for various companies and startups in Silicon Valley |
R&D Engineer
Hewlett Packard , Instruments division
1984 – 1992 (8 years)
| ● | Developed DSP signal processing algorithms, system FPGA board and ASIC chip designs for Hewlett-Packard Dynamic Signal and Spectrum Analyzers |
Vu Doan Theriot, MD
President & Cofounder
KoolTechs Inc.
2013 – Present
NousLogic Inc.
2014 – Present
NousLogic Healthcare Inc.
2014 - Present
President
Vu Doan Theriot, MD, PA
1989 – Present (25 years)
Family Physician
Management Compensation
There is no accrued compensation that is due any member of Management. Each Manager will be entitled to reimbursement of expenses incurred while conducting Company business. Each Manager may also be a shareholder in the Company and as such will share in the profits of the Company when and if revenues are disbursed. Management reserves the right to reasonably increase their salaries assuming the business is performing profitably and Company revenues are growing on schedule. Any augmentation of these salaries will be subject to the profitability of the Business and the effect on the Business cash flows. Management currently has no compensation and will not receive any salary until the company realizes net profit.
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Page 8 of 47
The following table contains certain information as of January 27, 2021 as to the number of Shares beneficially owned by (i) each person known by the Company to own beneficially more than 5% of the Company’s Shares, (ii) each person who is a Managing Officer of the Company, (iii) all persons as a group who are Directors and/or Officers of the Company, and as to the percentage of the outstanding Shares held by them on such dates and as adjusted to give effect to this Offering.
| Name | Position | Current % | Post Offering Max % | |||||||||
| Hoang H Nhu | CEO | 65.9 | 53.2 | % | ||||||||
| Vu D Theriot, MD | President | 28.25 | 22.7 | % | ||||||||
| Investors | Investors | 5.85 | 24.1 | % | ||||||||
The Company is not presently a party to any material litigation, nor to the knowledge of Management is any litigation threatened against the Company, which may materially affect the business of the Company or its assets.
| COMPANY: | Nouslogic Healthcare, Inc. |
| HEADQUARTERS: | Houston, Texas, United States |
| COMPANY INDUSTRY: | Med-Tech Real Time Locating Solutions ( RLTS”) |
| TYPE OF SECURITY: | Shares of Stock (Reg A Tier 2) |
| TERM OF ENGAGEMENT: | 12 Months |
| AMOUNT: | $5.5 Million |
| INVESTOR: | Per Regulation A Tier 2 Accredited Investors and Investors Investing No More Than 10% of their Annual Income or Net Worth |
| PRICE PER SHARE: | 135,000 shares of Common Stock at $40.74 per Share (the “Original Purchase Price”). |
| MINIMUM INVESTMENT: | $10,000 Minimum Investment (245 Shares Minimum) |
| FILING FEES: | $~4,000 (Client to submit directly to SEC) |
| REG A COMPLIANCE FEES: | $10,000 (paid at time of engagement) |
| COSTS TO COMPLETE: | Including Consulting, Investor Relations, Marketing paid at First Close Initial Funding |
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Page 9 of 47
| MARKETING COSTS: | Costs shall be derived from fees Under contract with USCG Advisors, LLC |
| INVESTOR RELATION COSTS: | Costs shall be derived from fees Under contract with USCG Advisors, LLC |
| ADVISORY FEES: | At First Close Initial Funding |
| SUCCESS FEES: | 7% & 3.5% Warrants (non-contingent) |
| PRE-MONEY VALUATION: | Fully diluted pre-money valuation of $34,000,000 and a fully diluted post-money valuation of $39,500,000, subject to change. Based on a sale of 13.5% of the Company s equity. |
| CAPITALIZATION: | The Company s capital structure before and after the Closing is set forth in the Appendix. |
| PLACEMENT AGENT: | US Capital Global Securities, LLC |
Nouslogic Healthcare, Inc., (‘Nouslogic’, or the ‘Company’), is a Real Time Locating Solutions (‘RTLS’) provider of innovative infection control, compliance, and monitoring technology for the healthcare, food service, and hospitality markets. Nouslogic’s patented Blue Tooth Low Energy (‘BLE’) mesh network creates a Healthcare Event Management System (‘HEMS’) and Remote Patient Monitoring (RPM) System to monitor and enforce compliance for critical hospital events such as infection control protocols (hand washing) and home-based vitals monitoring. In late 2020 the Company began to recognize revenue from the first of its 3 sales verticals, the sale and monthly utilization of their RPM (Remote Patient Monitoring) device. Initial trial sales of the system around the greater Houston area have resulted in significant current and future revenue for the company. The pace of use of the equipment, which requires a monthly access fee, far outpaced the projections carried within these financial documents. Expenses are in line with forecasted expectations and Management believes and the resulting margin, EBITDA, and other leading indicators of success may potentially be better than the forecasts contained herein.
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Page 10 of 47
| Summary Consolidated | ||||||
| Currency USD | ||||||
| Unaudited By Management | ||||||
| 2021 | 2022 | 2023 | 2024 | 2025 | Cumulative | |||||||||||||||||||
| Revenue | $ | 12,033,474 | $ | 97,557,042 | $ | 216,081,537 | $ | 384,553,194 | $ | 721,693,842 | $ | 1,431,919,088 | ||||||||||||
| Year to year Growth (%) | 710.71 | % | 121.49 | % | 77.97 | % | 87.67 | % | 98.41 | % | ||||||||||||||
| Total Operating Expenses | ($ | 6,302,847 | ) | ($ | 51,910,421 | ) | ($ | 115,210,555 | ) | ($ | 198,266,445 | ) | ($ | 350,699,031 | ) | ($ | 722,389,298 | ) | ||||||
| EBITDA Margin (% of total Sales) | 52.38 | % | 53.21 | % | 53.32 | % | 51.56 | % | 48.59 | % | 50.45 | % | ||||||||||||
| EBITDA | $ | 4,215,166 | $ | 45,646,620 | $ | 100,870,982 | $ | 186,286,749 | $ | 370,994,811 | $ | 708,014,329 | ||||||||||||
| % of Sales | 35.03 | % | 46.79 | % | 46.68 | % | 48.44 | % | 51.41 | % | 49.45 | % | ||||||||||||
| Net Income | $ | 3,329,981 | $ | 36,060,830 | $ | 79,688,075 | $ | 147,166,532 | $ | 293,085,901 | $ | 559,331,320 | ||||||||||||
| % of Sales Total | 27.67 | % | 36.96 | % | 36.88 | % | 38.27 | % | 40.61 | % | 39.06 | % | ||||||||||||
**Source: Nouslogic Financial Model 10.08.2020.xls
Nouslogic Revenue is broken in three separate parts; Installation, Database, and Service. On average, Installation provides the bulk of the Revenue at ~60%, while Database and Service provide ~37% and 3% respectively. After the initial Product & Sales ramp, Revenue growth is estimated at ~88% per year. This growth is expected to be primarily due to RPM Installation & Database Revenue. This Gross Margin Percentage of Nouslogic is estimated at ~51%, while the Net Profit Margin is forecasted at ~39%. The highest Operating Expense is Payroll, which is expected to decrease as a percent of Revenue due to operational efficiency. The total Effective Tax Rate is estimated to be ~21% per year.
SOURCES & USES
Transaction Summary:
Nouslogic is seeking $5,500,000 through private equity from individual or institutional investors by offering 135,000 shares of Common Stock at $40.74 per share. The Company will achieve a post money valuation of ~$39.5 million with new investment having ~13.5% ownership. Use of proceeds will be for commercial launch of the product to include key staffing, leasing of office space, sales & marketing efforts, legislative initiatives, and continued R&D of next generation products.
| Sources & Use of Funds | ||||||||||
| Reg A Equity | $ | 5,500,000 | Personnel | $ | 1,500,000 | |||||
| Manufacturing /R&D | $ | 1,250,000 | ||||||||
| Legislative Initiative | $ | 1,000,000 | ||||||||
| Marketing | $ | 750,000 | ||||||||
| Banking Fees | $ | 500,000 | ||||||||
| Contingency | $ | 500,000 | ||||||||
| Total Source | $ | 5,500,000 | Total Use | $ | 5,500,000 | |||||
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Page 11 of 47
Uses:
1. Personnel – includes payroll for 12 months
2. Manufacturing – includes COGS for 12 months
3. Marketing – Includes fixed marketing for 2 years
Nouslogic Healthcare, Inc. is the brainchild of Hoang Nhu. As an R&D executive in the early 2000s at Broadcom, a leading wireless semiconductor company, Mr. Nhu was always looking to the future. In 2005, he formed a small team of advisors to help him target low cost wireless technologies for emerging markets. Though they did not know it yet, this small team of advisors became the backbone of what would become Nouslogic Healthcare, Inc. Now, Nouslogic’s technology provides RTLS performance that can potentially result in better health and regulatory compliance, while increasing efficiency, leading to cost savings for the organization.
Nouslogic HEMS system targets forward looking institutions to help reduce infections, improve patient/customer/employee experience, eliminate CMS penalties, reduce liability, and save lives. HEMS has been demonstrated to dramatically improve hand washing compliance. Testing has demonstrated real world increases from 65% to over 90% compliance rates with the addition of the HEMS system.1 Additionally, the HEMS architecture can be used for everything from enhancing maintenance and locating equipment, to securing maternity wards.
Nouslogic’s RPM Monitoring System uses the same technology to provide physicians the ability to monitor a patient’s vital statistics and drug interactions at home. The ability to monitor a patient in real time is a vital component for the management of chronic disease and the prevention of emergent events such as stroke. Due to the dramatic cost savings this technology can offer CMS (Center for Medicare and Medicaid studies) has recently authorized strong reimbursement for the use of this technology.2 The 50M patients currently enrolled in Medicare make the largest single target market of any med tech launch in recent history.
Healthcare Event Management System - HEMS
Nouslogic has developed HEMS to system to provide real time monitoring and reporting of hand hygiene events through the propriety mesh network, wearer badges, and soap dispenser receivers. Information is provided in real time to a reporting dashboard that delivers instantaneous feedback to an organization’s leadership. Nouslogic will deploy a team to install the HEMS technology. Nouslogic will then monitor key activities through the system and the complimentary software that records the information. The system is plug and play and can be connected to any hand soap dispenser within the facility.
Multiple Applications
Nouslogic’s current baseline hospital mesh network technology serves as the backbone for expansion of products across various industries. The same technology that supports infection reduction in hospitals can be used for multiple other applications. In addition to the IRMS, users receive access to Nouslogic’s Service Enhancement System (‘SES’). The HEMS/SES allows instantaneous reporting of maintenance and equipment issues, generates reports for staff, and tracks completions. The hospital can choose to control this system entirely themselves, or to open it up for patient and visitor reporting. The expected end result is a more efficient hospital with higher patient safety and satisfaction. HEMS offers additional modules focused on patient throughput, maternity security, equipment locating, nursing and physician rounds, and patient interaction verification. Additional markets include industrial food preparation, restaurant, hospitality, and security.
1 65% compliance based on Bay Area Regional Hospital internal metrics. The rise to 90% compliance was taken directly from Nouslocic HEMS trial data reports.
2 https://www.cms.gov/medicare/physician-fee-schedule/search/overview
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Page 12 of 47
Potential Benefits for Hospitals
| ● | Reduces hospital acquired infections | |
| ● | Protection from CMS penalties | |
| ● | Works with existing protocols | |
| ● | Reduces liability/regulatory risk | |
| ● | Minimal maintenance/IT impact | |
| ● | Instant feedback to healthcare providers, management |
REMOTE PATIENT MONITORING - RPM
Designed to service physicians and their 50M Medicare patients, the RPM System allows physicians to monitor patient vials, weight, Pulse Ox, Blood Glucose and more from the convenience of the patient’s home. This window into a patient’s daily status is instrumental in managing chronic conditions and predicting / treating emergent events. As a result of this demonstrated capability, and fueled by COVID 19, CMS has authorized extensive reimbursement for the use of this technology.
Remote Patient Monitoring (‘RPM’)
| ● | Communication Hub | |
| ● | Smart Scale | |
| ● | Smart Pill Bottle |
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Page 13 of 47
| ● | Smart 7 Day Pill Box | |
| ● | Smart Blood Pressure Monitor | |
| ● | Smart Pulse Ox | |
| ● | Emergency Smart Card | |
| ● | Emergency Button |
Current Status
| ● | HEMS/IRMS has been beta tested and validated over a six-month trial: |
| o | Currently awaiting installation date at Connecticut Children’s Hospital | |
| o | Beta Testing |
| ■ | HEMS Efficacy |
| ☐ | Beta Test Background | |
| ☐ | Houston Area Hospital | |
| ☐ | 6 Months of data | |
| ☐ | Internal Metrics: 65% compliance prior to implementation.3 |
| o | Beta Results |
| ☐ | Hygiene compliance rose to 92%4 | |
| ☐ | Sustained efficacy | |
| ☐ | High reliability equipment performance |
| o | Now Covid-19 contract tracing capable | |
| o | Now LTE/5G capable for public deployment | |
| o | Connecticut Children’s is implementing HEMS/IRMS immediately |
3 65% compliance based on Bay Area Regional Hospital internal metrics.
4
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Page 14 of 47
| ● | RPM has been validated and is in use in 29 Offices in Houston area |
| o | Current project run rate is projected to exceed $20M in 12 months | |
| o | CMS payments established for RPM / improving for 2021 | |
| o | Ready for IMMEDIATE nationwide 1099 Contract Sales Launch |
| ● | No FDA requirements for any component of systems. All accessories for RPM have received FDA 510K | |
| ● | Positioned for full-scale commercialization and sales |
Revenue Model
Nouslogic’s revenue streams are (1) hospital revenue, (2) food franchise revenue, (3) hotel revenue, (4) independent dining revenue, and (5) other (grocery stores, etc.). For each of these revenue streams, the Company generates revenue in three ways: (1) installation revenue, (2) DB revenue, and (3) service revenue.
Sales Projections
| Total Sources | 5,500,000 | 100.00 | % | Total Uses | 5,500,000 | 100.00 | % | |||||||||||||||||
| Sales Summary | ||||||||||||||||||||||||
| Year | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | 5-Year Sum | ||||||||||||||||||
| Hospital Revenue (Installation) | 2,437,614 | 9,489,376 | 14,939,597 | 20,820,417 | 32,323,749 | 80,010,753 | ||||||||||||||||||
| Hospital Revenue (Database) | 210,772 | 2,908,797 | 7,974,702 | 15,364,805 | 26,380,279 | 52,839,354 | ||||||||||||||||||
| Hospital Revenue (Service) | 19,570 | 269,014 | 737,421 | 1,421,323 | 2,440,732 | 4,888,060 | ||||||||||||||||||
| Food Franchise Revenue (Installation) | 500,000 | 2,000,000 | 2,166,667 | 7,000,000 | 12,458,333 | 24,125,000 | ||||||||||||||||||
| Food Franchise Revenue (Database) | 115,714 | 425,000 | 1,300,000 | 2,912,500 | 5,631,250 | 10,384,464 | ||||||||||||||||||
| Food Franchise Revenue (Service) | 1,830 | 55,327 | 288,244 | 877,619 | 2,091,682 | 3,314,702 | ||||||||||||||||||
| Hotel Revenue (Installation) | 135,000 | 540,000 | 1,080,000 | 1,890,000 | 3,105,000 | 6,750,000 | ||||||||||||||||||
| Hotel Revenue (Database) | 10,125 | 114,750 | 351,000 | 786,375 | 1,520,438 | 2,782,688 | ||||||||||||||||||
| Hotel Revenue (Service) | — | 14,938 | 77,826 | 236,957 | 564,754 | 894,475 | ||||||||||||||||||
| Independent Dinning Revenue (Installation) | 1,200,000 | 4,800,000 | 9,600,000 | 9,600,000 | 27,600,000 | 52,800,000 | ||||||||||||||||||
| Independent Dinning Revenue (Database) | 494 | 1,020,000 | 3,120,000 | 6,990,000 | 13,515,000 | 24,645,494 | ||||||||||||||||||
| Independent Dinning Revenue (Service) | 4,393 | 132,786 | 691,786 | 2,106,286 | 5,020,036 | 7,955,286 | ||||||||||||||||||
| Other (Grocery etc.) Revenue (Installation) | 95,000 | 380,000 | 760,000 | 1,219,167 | 2,185,000 | 4,639,167 | ||||||||||||||||||
| Other (Grocery etc.) Revenue (Database) | 7,125 | 80,750 | 247,000 | 525,667 | 1,036,688 | 1,897,229 | ||||||||||||||||||
| Other (Grocery etc.) Revenue (Service) | 348 | 10,512 | 54,766 | 163,630 | 384,535 | 613,792 | ||||||||||||||||||
| RPM Revenue (Installation) | 2,720,000 | 15,150,000 | 20,070,000 | 26,865,000 | 54,000,000 | 118,805,000 | ||||||||||||||||||
| RPM Revenue (Database) | 4,575,488 | 60,165,792 | 152,622,528 | 285,773,448 | 531,436,368 | 1,034,573,624 | ||||||||||||||||||
| Subtotal | 12,033,474 | 97,557,042 | 216,081,537 | 384,553,194 | 721,693,842 | 1,431,919,088 |
Nouslogic Revenue is broken in three separate parts; Installation, Database, and Service. On average, Installation provides the bulk of the Revenue at ~60%, while Database and Service provide ~37% and 3% respectively. Typically, Data and Service start the month following Installation. The Revenue can be broken down into three main sections; Hospital & Hotel, Food & Dining, and RPM / Other. The Hospital and Hotel Installation Revenues are based upon the amount of beds, while the amount of Database Revenue is based upon the amount of rooms, and the Service Revenue is based upon a monthly fee. The projected growth for these is 4% per year. The Food & Dining Revenue is based upon the number of Employees. The Installation fee is $2,500 per 14 Employees, while the Database fee is 30% and the Service is 20%. The RPM Revenue is based upon the amount of accounts and a flat fee per account. This Gross Margin Percentage of Nouslogic is estimated at ~51%, while the Net Profit Margin is estimated at ~39%. The highest Operating Expense is Payroll, which is expected to decrease as a percent of Revenue due to operational efficiency.
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Page 15 of 47
Assumptions Worksheet :
| Assumption | Metric | Detail | |
| 1 | Revenue Mix - Installation | 60% | This Revenue Stream provides about 60% the total revenue mix |
| 2 | Revenue Mix - Database | 37% | This Revenue Stream provides about 37% the total revenue mix |
| 3 | Revenue Mix - Service | 3% | This Revenue Stream provides about 3% the total revenue mix |
| 4 | Series ” A” Raise Amount | 5,500,000 | 1.5M to Personnel Costs, 750K to Manufacturing, 500K Contingency Costs, 1M Legislative Costs, 750K Marketing Costs, 600k Banking Costs, 400K Other Costs |
| 5 | Capacity | Capacity Depends upon the type of beds | |
| 6 | 6-24 beds | 25% | Average Capacity per month for new hospitals for this bed amount range |
| 7 | 25-49 beds | 58% | Average Capacity per month for new hospitals for this bed amount range |
| 8 | 50-99 beds | 49% | Average Capacity per month for new hospitals for this bed amount range |
| 9 | 100-199 beds | 49% | Average Capacity per month for new hospitals for this bed amount range |
| 10 | 200-299 beds | 25% | Average Capacity per month for new hospitals for this bed amount range |
| 11 | 300-399 beds | 16% | Average Capacity per month for new hospitals for this bed amount range |
| 12 | 400-499 beds | 8% | Average Capacity per month for new hospitals for this bed amount range |
| 13 | 500+ | 16% | Average Capacity per month for new hospitals for this bed amount range |
| 14 | 6-24 beds Installation Cost | 1,000 | The average Installation Cost for this bed amount range |
| 15 | 25-49 beds Installation Cost | 975 | The average Installation Cost for this bed amount range |
| 16 | 50-99 beds Installation Cost | 950 | The average Installation Cost for this bed amount range |
| 17 | 100-199 beds Installation Cost | 900 | The average Installation Cost for this bed amount range |
| 18 | 200-299 beds Installation Cost | 850 | The average Installation Cost for this bed amount range |
| 19 | 300-399 beds Installation Cost | 800 | The average Installation Cost for this bed amount range |
| 20 | 400-499 beds Installation Cost | 750 | The average Installation Cost for this bed amount range |
| 21 | 500+ Installation Cost | 700 | The average database Cost for this bed amount range per room |
| 22 | 6-24 beds Database Pricing | 37 | The average database Cost for this bed amount range per room |
| 23 | 25-49 beds Database Pricing | 36 | The average database Cost for this bed amount range per room |
| 24 | 50-99 beds Database Pricing | 35 | The average database Cost for this bed amount range per room |
| 25 | 100-199 beds Database Pricing | 34 | The average database Cost for this bed amount range per room |
| 26 | 200-299 beds Database Pricing | 33 | The average database Cost for this bed amount range per room |
| 27 | 300-399 beds Database Pricing | 32 | The average database Cost for this bed amount range per room |
| 28 | 400-499 beds Database Pricing | 31 | The average database Cost for this bed amount range per room |
| 29 | 500+ Database Cost | 30 | The average database Cost for this bed amount range per room |
| 30 | 6-24 beds Service Cost | 3 | The average monthly service Cost for this bed amount range |
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Page 16 of 47
| Assumption | Metric | Detail | |
| 31 | 25-49 beds Service Cost | 3 | The average monthly service Cost for this bed amount range |
| 32 | 50-99 beds Service Cost | 3 | The average monthly service Cost for this bed amount range |
| 33 | 100-199 beds Service Cost | 3 | The average monthly service Cost for this bed amount range |
| 34 | 200-299 beds Service Cost | 3 | The average monthly service Cost for this bed amount range |
| 35 | 300-399 beds Service Cost | 3 | The average monthly service Cost for this bed amount range |
| 36 | 400-499 beds Service Cost | 3 | The average monthly service Cost for this bed amount range |
| 37 | 500+ Service Cost | 3 | The average monthly service Cost for this bed amount range |
| 38 | Food and Hospitality Revenue Stream | There are four different areas for the Food and Hospitality Revenue Stream, Franchise Food, Hotel, Independent Dining & Other (Grocery, Etc) | |
| 39 | Franchise Food Average Employees | 16 | The number of average employees for this Food and Hospitality Revenue Stream |
| 40 | Hotel Average Employees | 11 | The number of average employees for this Food and Hospitality Revenue Stream |
| 41 | Independent Dinning Average Employees | 17 | The number of average employees for this Food and Hospitality Revenue Stream |
| 42 | Other (Grocery, etc.) Average Employees | 42 | The number of average employees for this Food and Hospitality Revenue Stream |
| 43 | Franchise Food Database Pricing | 16 | The average database Cost for this Food and Hospitality Revenue Stream |
| 44 | Hotel Database Pricing | 11 | The average database Cost for this Food and Hospitality Revenue Stream |
| 45 | Independent Dinning Database Pricing | 17 | The average database Cost for this Food and Hospitality Revenue Stream |
| 46 | Other (Grocery, etc.) Database Pricing | 42 | The average database Cost for this Food and Hospitality Revenue Stream |
| 47 | Franchise Food Service Cost | 16 | The average monthly service Cost for this Food and Hospitality Revenue Stream |
| 48 | Hotel Service Cost | 11 | The average monthly service Cost for this Food and Hospitality Revenue Stream |
| 49 | Independent Dinning Service Cost | 17 | The average monthly service Cost for this Food and Hospitality Revenue Stream |
| 50 | Other (Grocery, etc.) Service Cost | 42 | The average monthly service Cost for this Food and Hospitality Revenue Stream |
| 51 | Installation Cost per 14 Employees | 2,500 | This Installation cost per 14 Employees |
| 52 | Franchise Food Installation (COGS) | 285 | This is the direct Cost of Goods Sold for this Revenue Stream |
| 53 | Franchise Food Maint (COGS) | 86 | This is the direct Cost of Goods Sold for this Revenue Stream |
| 54 | Hotel Installation (COGS) | 285 | This is the direct Cost of Goods Sold for this Revenue Stream |
| 55 | Hotel Maint (COGS) | 86 | This is the direct Cost of Goods Sold for this Revenue Stream |
| 56 | Independent Dinning Installation (COGS) | 285 | This is the direct Cost of Goods Sold for this Revenue Stream |
| 57 | Independent Dinning Maint (COGS) | 86 | This is the direct Cost of Goods Sold for this Revenue Stream |
| 58 | Other Installation (COGS) | 285 | This is the direct Cost of Goods Sold for this Revenue Stream |
| 59 | Other Maint (COGS) | 86 | This is the direct Cost of Goods Sold for this Revenue Stream |
| 59 | Hospital Market Capture Rate (over 5 years) | 3% | The expected Market Capture Rate at the end of Year 5 |
| 60 | RPM Market Capture Rate (over 5 years) | 5% | The expected Market Capture Rate at the end of Year 5 |
| 61 | Payroll Expenses | 17% | The Total Expected Payroll Expenses (excluding fixed gross pay) is 17% |
| 62 | Marketing Expense Growth | 10% | Marketing Expenses are expected to grow 10% annually |
| 63 | US Hospital Bed Growth | 1% | The Total US Hospital Bed Growth is expected to 1% annually |
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Page 17 of 47
Assumptions Worksheet :
| Assumption | Metric | Detail | |
| 1 | Revenue Mix -Installation | 60% | This Revenue Stream provides about 60% of the total revenue mix |
| 2 | Revenue Mix -Database | 37% | This Revenue Stream provides about 37% of the total revenue mix |
| 3 | Revenue Mix -Service | 3% | This Revenue Stream provides about 3% of the total revenue mix |
| 4 | Series “A” Raise Amount | 5,500,000 | 1.5M to Personnel Costs, 750K to Manufacturing, 500K Contingency Costs, 1M Legislative Costs, 750K Marketing Costs, 600K Banking Costs, 400K Other Costs |
| 5 | Capacity | Capacity depends upon the type of beds | |
| 6 | 6-24 beds | 25% | Average Capacity per month for new hospitals for this bed amount range |
| 7 | 25-49 beds | 58% | Average Capacity per month for new hospitals for this bed amount range |
| 8 | 50-99 beds | 49% | Average Capacity per month for new hospitals for this bed amount range |
| 9 | 100-199 beds | 49% | Average Capacity per month for new hospitals for this bed amount range |
| 10 | 200-299 beds | 25% | Average Capacity per month for new hospitals for this bed amount range |
| 11 | 300-399 beds | 16% | Average Capacity per month for new hospitals for this bed amount range |
| 12 | 400-499 beds | 8% | Average Capacity per month for new hospitals for this bed amount range |
| 13 | 500+ | 16% | Average Capacity per month for new hospitals for this bed amount range |
| 14 | 6-24 beds Installation Cost | 1,000 | The average Installation Cost for this bed amount range |
| 15 | 25-49 beds Installation Cost | 975 | The average Installation Cost for this bed amount range |
| 16 | 50-99 beds Installation Cost | 950 | The average Installation Cost for this bed amount range |
| 17 | 100-199 beds Installation Cost | 900 | The average Installation Cost for this bed amount range |
| 18 | 200-299 beds Installation Cost | 850 | The average Installation Cost for this bed amount range |
| 19 | 300-399 beds Installation Cost | 800 | The average Installation Cost for this bed amount range |
| 20 | 400-499 beds Installation Cost | 750 | The average Installation Cost for this bed amount range |
| 21 | 500+ Installation Cost | 700 | The average Installation Cost for this bed amount range |
| 22 | 6-24 beds Database Pricing | 37 | The average database Cost for this bed amount range per room |
| 23 | 25-49 beds Database Pricing | 36 | The average database Cost for this bed amount range per room |
| 24 | 50-99 beds Database Pricing | 35 | The average database Cost for this bed amount range per room |
| 25 | 100-199 beds Database Pricing | 34 | The average database Cost for this bed amount range per room |
| 26 | 200-299 beds Database Pricing | 33 | The average database Cost for this bed amount range per room |
| 27 | 300-399 beds Database Pricing | 32 | The average database Cost for this bed amount range per room |
| 28 | 400-499 beds Database Pricing | 31 | The average database Cost for this bed amount range per room |
| 29 | 500+ database Cost | 30 | The average database Cost for this bed amount range per room |
| 30 | 6-24 beds Service Cost | 3 | The average monthly service Cost for this bed amount range |
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Page 18 of 47
| Assumption | Metric | Detail | |
| 31 | 25-49 beds Service Cost | 3 | The average monthly service Cost for this bed amount range |
| 32 | 50-99 beds Service Cost | 3 | The average monthly service Cost for this bed amount range |
| 33 | 100-199 beds Service Cost | 3 | The average monthly service Cost for this bed amount range |
| 34 | 200-299 beds Service Cost | 3 | The average monthly service Cost for this bed amount range |
| 35 | 300-399 beds Service Cost | 3 | The average monthly service Cost for this bed amount range |
| 36 | 400-499 beds Service Cost | 3 | The average monthly service Cost for this bed amount range |
| 37 | 500+ Service Cost | 3 | The average monthly service Cost for this bed amount range |
| 38 | Food and Hospitality Revenue Stream | There are four different areas for the Food and Hospitality Revenue Stream: Franchise Food, Hotel, Independent Dining, & Other (Grocery. Etc) | |
| 39 | Franchise Food Average Employees | 16 | The number of average employees for this Food and Hospitality Revenue Stream |
| 40 | Hotel Average Employees | 11 | The number of average employees for this Food and Hospitality Revenue Stream |
| 41 | Independent Dinning Average Employees | 17 | The number of average employees for this Food and Hospitality Revenue Stream |
| 42 | Other (Grocery, etc.) Average Employees | 42 | The number of average employees for this Food and Hospitality Revenue Stream |
| 43 | Franchise Food Database Pricing | 16 | The average database Cost for this Food and Hospitality Revenue Stream |
| 44 | Hotel Database Pricing | 11 | The average database Cost for this Food and Hospitality Revenue Stream |
| 45 | Independent Dinning Database Pricing | 17 | The average database Cost for this Food and Hospitality Revenue Stream |
| 46 | Other (Grocery, etc.) Database Pricing | 42 | The average database Cost for this Food and Hospitality Revenue Stream |
| 47 | Franchise Food Service Cost | 16 | The average monthly service Cost for this Food and Hospitality Revenue Stream |
| 48 | Hotel Service Cost | 11 | The average monthly service Cost for this Food and Hospitality Revenue Stream |
| 49 | Independent Dinning Service Cost | 17 | The average monthly service Cost for this Food and Hospitality Revenue Stream |
| 50 | Other (Grocery, etc.) Service Cost | 42 | The average monthly service Cost for this Food and Hospitality Revenue Stream |
| 51 | Installation Cost per 14 Employees | 2,500 | This Installation cost per 14 Employees |
| 52 | Franchise Food Installation (COGS) | 285 | This is the direct Cost of Goods Sold for this Revenue Stream |
| 53 | Franchise Food Maint (COGS) | 86 | This is the direct Cost of Goods Sold for this Revenue Stream |
| 54 | Hotel Installation (COGS) | 285 | This is the direct Cost of Goods Sold for this Revenue Stream |
| 55 | Hotel Maint (COGS) | 86 | This is the direct Cost of Goods Sold for this Revenue Stream |
| 56 | Independent Dinning Installation (COGS) | 285 | This is the direct Cost of Goods Sold for this Revenue Stream |
| 57 | Independent Dinning Maint (COGS) | 86 | This is the direct Cost of Goods Sold for this Revenue Stream |
| 58 | Other Installation (COGS) | 285 | This is the direct Cost of Goods Sold for this Revenue Stream |
| 59 | Other Maint (COGS) | 86 | This is the direct Cost of Goods Sold for this Revenue Stream |
| 59 | Hospital Market Capture Rate (over 5 Years) | 3% | The expected Market Capture Rate at the end of Year 5 |
| 60 | RPM Market Capture Rate (over 5 Years) | 5% | The expected Market Capture Rate at the end of Year 5 |
| 61 | Payroll Expenses | 17% | The Total Expected Payroll Expenses (excluding fixed gross pay) is 17% |
| 62 | Marketing Expense Growth | 10% | Marketing Expenses are expected to grow 10% annually |
| 63 | US Hospital Bed Growth | 1% | The Total US Hospital Bed Growth is expected to 1% annually |
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Page 19 of 47
Exit Strategy
Nouslogic has identified a Merger & Acquisition (“M&A”) strategy as the preferred exit plan. The Company anticipates a potential M&A opportunity with one of their sales partners. In addition to an M&A, Nouslogic has identified technology liquidation as a possible strategy in the event of a negative contingency.
Target Market
Nouslogic is targeting the USD $1 billion hospital market, USD $10B Physician practice market and the USD $4 billion food and hospitality market. In 2015 the Center for Medicare & Medicaid Studies (‘CMS’) initiated the Hospital Acquired Condition Reduction Program (‘HACRP’). The program aimed to reduce hospital acquired infections by holding poor performing organizations fiscally accountable and penalizing the lowest quartile of hospitals with a 1% reduction in their Medicare reimbursement. These penalties can amount to millions of dollars per year for a small to mid-sized hospital, and the reduction in funding makes implementation of compliance programs fiscally challenging as less money is available to allocate to such programs. With over 6,210 hospitals in the United State with an average of 36,510,207 being admitted in 2019 alone, there has been a high demand for cleaner medical facilities across the nation. This demand has increased exponentially in 2020, due to the Covid-19 pandemic. With regulators making compliance even more difficult hospitals have become a continually watchful eye that could lead to even greater fees and penalties. Additionally, it should reduce the number of deaths related to in-hospital acquired infections.
In late 2019 CMS authorized 4 CPT codes to provide monthly payments to physicians for using Remote Patient Monitoring in support of Medicare patients. The COVID pandemic and subsequent lock down only further incentivized this use and reimbursement. The growth potential in this segment is unparalleled as demonstrated by Nouslogic’s Beta test which captured 29 accounts in 4 months and which can yield a projected run rate of $20M after 1 year.
Demand Generators
| ● | Covid-19: Massive public response to covid-19 pandemic places an enormous emphasis on hygiene compliance. Nouslogic addresses this issue with technology for compliance and patient tracing. | |
| ● | HACRP: Medicare now penalizes the bottom 20% of hospitals for patient infections acquired while admitted by repatriating Medicare payments. Deploying Nouslogic’s system can reduce the infections acquired in hospital, ultimately saving hospitals millions of dollars in revenue that would otherwise be repatriated back to Medicare. | |
| ● | Legislation: State and federal legislation mandating hygiene compliance technology is anticipated. Nouslogic is positioned to take advantage of state and federal requirements. | |
| ● | CPT Code and reimbursement established by CMS for 2020 and recently reconfirmed for 2021. |
Competitive Advantage & Differentiators
Nouslogic has significant patent protection around its core technology having been granted two patents and one provisional at this time.
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Page 20 of 47
| Granted | Title | Expiration | ||
| US9980082 | Systems and method for tracking locations and activity | Feb 16, 2036 | ||
| U59959242 | Keys and sensors for daily consumer activities | May 7, 2033 | ||
| Pending (Application Control Number) | Title | Filed | ||
| 16/209,241 | Sensors and systems for IoT and IFTTT applications & related methods | Dec 4, 2018 |
The single largest potential competitor (Swipe Sense) is currently under lawsuit for patent infringement and does not enjoy the level of protection of Nouslogic. With significant patent protection as well as trade knowledge it is somewhat unlikely that any competitor could find legal standing to challenge Nouslogic. The core technology developed by Nouslogic is not only protected but could take years to independently develop as Nouslogic has over 5 years or research and development, incorporating and 30 years of industry experience needed to produce the HEMS system.
The hygiene market is highly fragmented. Currently multiple companies provide various components for hand hygiene within the hospital market. Cardinal, Mckeeson, Purell, and dozens of others compete for dispensers and soap. If those companies were to attempt to create their own compliance system, they could largely be limited to their existing customer base.
HEMS and other RTLS sales are largely governed by C-suite decision makers. Though an early-stage company may have the ability to develop technology that can provide similar solutions to the HEMS architecture, it is could bedifficult for them to actively sell in this space. This is due largely to the fact that large scale hospital infrastructure and software contracts are controlled by the larger players in the MedTech field – Stryker, Cardinal, McKeenson, etc. Without an ability to work with these companies a strong barrier to entry exists. Nouslogic, however, has relationships with executives at many of these companies and is pursuing a partnership strategy that can turn this barrier to entry into a strategic advantage.
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Page 21 of 47
Competitors
| Nouslogic Competitors | |||||||||
| Reference | Company | Founded | Public | Size | Location | Business Description | Products | Acquisitions | Additional Info |
| 1 | Nouslogic | 2013 | Private | 0-10 Employees | US | Real Time Locating Solutions (‘RTLS’) provider of innovative infection control, compliance, and monitoring technology for the healthcare, food service, and hospitality markets. | Patented Blue Tooth Low Energy (‘BLE’) mesh network creates a Healthcare Event Management System (‘HEMS’) and Remote Patient Monitoring (RPM) System to monitor and enforce compliance for critical hospital events such as infection control protocols (hand washing) and home-based vitals monitoring | N/A | N/A |
| 2 | HyGreen Inc | 2005 | Private | 11-50 Employees | US | Offers electronic hand hygiene monitoring systems for hospitals, skilled nursing facilities, doctor's offices, restaurants, and educational institutions | Electronic device to monitor/record hand hygiene activities; remind healthcare workers to wash hands after treating patients; badge to record hand hygiene activities; bed monitor that monitors and reminds healthcare workers if they had forgotten to wash their hands; and a reporting system that records data of hand hygiene activities | Acquired by Biovigil | N/A |
| 3 | Biovigil | 2006 | Private | 11-50 Employees | US | Developer of hygiene technologies intended to protect and improve patient and staff safety in hospitals. | Hand hygiene solutions with a simple room sensor, a plug-in base station and a small personnel use badge to detect and monitor hand washing events and automatically communicate compliance information to base stations, enabling hospitals and clinics to control infection and disease mitigation. | Acquired HyGreen Inc. | Latest deal amount $5Million |
| 4 | Proventix Systems | 2007 | Private | 11-50 Employees | US | specializes in hand hygiene compliance rounding solutions and quality improvement | Proventix's nGage™ system is a radio frequency identification (RFID) network and user application. It collects and provides a hospital with hand hygiene data, allows clinicians to visualize individual hand hygiene compliance, and provides top-level and granular analytics with dashboards. | N/A | N/A |
| 5 | General Sensing Limited | 2005 | Private | 11-50 Employees | US and Hong Kong | General Sensing is a healthcare IT solutions provider dedicated to helping organizations harness the power of sensor technology to transform their operations. | Comprehensive electronic hand hygiene compliance solution focused on accurately measuring the WHO's Five Moments of Hand Hygiene, specifically Moments 1 and 4, before and after patient touch. Clinically-tested and peer-reviewed MedSense alleviates the burden of visual observation with a fully-automated solution that improves hand hygiene compliance and reduces the spread of HAIs. | N/A | N/A |
| 6 | CenTrak | 2003 | Private | 51-100 employees | US | CenTrak is the Real-Time Location System (RTLS) that provides precise and cost-effective location solutions for healthcare. | Real-Time Location System (RTLS) | Acquired by Halma | CenTrak was acquired by Halma for $140 million in 2016 |
| 7 | Halma | 1894 | Public (HLMA:LN) | 6992 employees | UK | Halma PLC is a health and safety sensor technology group which manufactures products that detect hazards and also protect assets and people at work in public and commercial buildings. | Technologies and products that are used for analysis in safety, environmental and leisure related markets, including water, to improve personal and public health. | Acquired CenTrak | Acquired CenTrak for $140 million in 2016 |
| 8 | UltraClenz | 1995 | Private | not available | US | Manufacturer of hand hygiene compliance monitoring systems. | Sanitizer dispensers, patient safeguard systems, touch-free soap and door monitoring systems | Acquired by Ecolab | N/A |
| 9 | Ecolab | 1923 | Public (ECL) | not available | US | Develops and offers services, technology, and systems | Specializing in water tratment, purification, cleaning, and hygiene in a wide range of applications. | Acquired UltraClenz | Revenue $14.9 billion (2019) |
References : (1) Nouslogic1; HyGreen Inc2; Biovigil3, (4) proventix Systems4, (5) general Sensing Limited5, (6) CenTrack6, (7) Halma7; (8) UltraClenz8, (9) Ecolab9
1 Source : https://uscapital.egnyte.com/negative/file/a42080b2-fe31-4f23-9d98-f63bfb56b448
2 Source : https://www.crunchbase.com/organization/hygreen
3 Source : https://pitchbook.com/profiles/company/100083-43
https://www.crunchbase.com/organization/biovigil
4 Source : https://crunchbase.com/organization/proventix-systems
5 Source : https://www.crunchbase.com/organization/general-sensing
6 Source : https://www.crunchbase.com/organization/http-www-centrak-com
7 Source : https://www.bloomberg.com/profile/company/HLMA:LN
8 Source : https://pitchbook.com/profiles/company/167620-33
9 Source : https://www.ecolab.com/
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Page 22 of 47
Summary of Valuation Docs
| Nouslogic Healthcare, Inc |
| Valuation Model Workbook Key (Table of Contents) |
| Updated February 22, 2021 |
| Spreadsheet Title | Workbook Tab Title |
| Section 1 - Valuation Summary | |
| Table of Contents | Key |
| Valuation Summary | F1 - Valuation |
| Section 2 - Market Capitalization | |
| Capitalization Table (Ownership Summary) | C1 - Market Capitalization |
| Stock Certificates | C2 - Stock Certificates |
| Stock Grants and Warrants | C3 - Grants & Warrants |
| Section 3 - Book Value | |
| Use of Funds | BV1 - Use of Funds |
| Current Balance Sheet | BV2 - Balance Sheet |
| Section 4 - Market Comparables | |
| Centrak Valuation | M1 - Centrak |
| Halyard Valuation | M2 - Halyard |
| Swipesense Valuation | M3 - Swipesense |
| Competitive Assessment Analysis | M4 - Competitive Assessment |
| Market Comparable Comparison | M5 - Comp Comparison |
| Section 5 - Discounted Cash Flow | |
| Pro Forma Summary | DCF1 - Pro Forma |
| Cash Flow Summary | DCF 2 - Cash Flow |
| Operating P&L | DCF 3 - Operating P&L |
| Hospitality Revenues | DCF 4- Hospitality Revenues |
| Hospital Revenues | DCF 5 - Hospital Revenues |
| RPM Revenues | DCF 6 - RPM Revenues |
| Overhead Budget | DCF7 - Overhead |
| SG&A Budget | DCF8 - SG&A |
| Payroll Budget | DCF9 - Payroll |
| Marketing Budget | DCF10 - Marketing |
| Section 6 - Assumptions | |
| Revenue & COS Assumptions | A1 - Rev & COS |
| Driver Assumptions | A2 - Driver Assumptions |
| RPM Revenue Share Model | A4 - RPM Revenue Share |
| Capacity Assumptions | A5 - Capacity |
| ROI Calculations | A6 - ROI |
| Installation and Market Share | A7 - Market Share |
| Marketing Budget Assumptions | A8 - Marketing Assumptions |
| Setup Cost Assumptions | A9 - Setup Costs |
| Sales Training Cost Assumptions | A10 - Sales Training |
5 Source: Nouslogic Financial Model 2.11.2021.xls
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Page 23 of 47
Valuation
Nouslogic Healthcare, Inc
Valuation
Summary
Updated February 11, 2021
| Valuation | Weighted Average | Type | Valuation | Weight | DCF Input Assumptions | STAT | ||||||||||||||||||||||||||
| Post Money | 39,759,078 | Market Capitalization | $ | 39,113,985 | 55.00 | % | BETA | 2 | ||||||||||||||||||||||||
| Pre-Money | 34,259,078 | Book Value | $ | 5,012,222 | 39.00 | % | Discount Rate | 19.47 | ||||||||||||||||||||||||
| Market Comparisons | $ | 147,268,333 | 5.00 | % | EBITDA Multiple | 10.7 | ||||||||||||||||||||||||||
| DCF | $ | 892,820,286 | 1.00 | % | Treasury Bond Rate | 1.60 | % | |||||||||||||||||||||||||
| 100 | % | |||||||||||||||||||||||||||||||
| Market Capitalization | Book Value | Market Comparisons | DCF | |||||||||||||||||||||||||||||
| Percent | Shares | Capitalization | Assets | EY | ||||||||||||||||||||||||||||
| Founders | 52.08 | % | 500,000 | 20,370,000 | Cash & Equivilents | 5,012,222 | Centrak | 143,000,000 | Year 1 FCF | 3,329,981 | ||||||||||||||||||||||
| Others (F/F Round)) | 6.74 | % | 64,751 | 2,637,956 | FFE | Halyard | 710,000,000 | Year 2 FCF | 36,060,830 | |||||||||||||||||||||||
| Seed (Atraza / Solis) | 6.28 | % | 60,337 | 2,458,129 | Equity in 3rd party Co's. | Swipesense | 30,610,000 | Year 3 FCF | 79,688,075 | |||||||||||||||||||||||
| Series A | 14.06 | % | 135,000 | 5,499,900 | Intellectual property | Year 4 FCF | 157,602,312 | |||||||||||||||||||||||||
| Company Pool | 20.83 | % | 200,000 | 8,148,000 | 5,012,222 | Subtotal | 883,610,000 | Year 5 FCF | 293,085,901 | |||||||||||||||||||||||
| Post Series A Shares | 100 | % | 960,088 | 18,743,985 | ||||||||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||||||||
| Account Payables | ||||||||||||||||||||||||||||||||
| Other Current Liabilities | ||||||||||||||||||||||||||||||||
| — | Discount Rate | 19.47 | % | |||||||||||||||||||||||||||||
| 1 | 2,787,295 | |||||||||||||||||||||||||||||||
| Owner Equity | 20,370,000 | 2 | 25,264,924 | |||||||||||||||||||||||||||||
| 3 | 46,732,256 | |||||||||||||||||||||||||||||||
| Series A Share Price | $ | 40.74 | 4 | 39,116,310 | ||||||||||||||||||||||||||||
| Average | 294,536,666.67 | 5 | 120,420,551 | |||||||||||||||||||||||||||||
| Reduction for Stage 50% | Terminal Value | 658,498,950 | ||||||||||||||||||||||||||||||
| Balance | 5,012,222 | |||||||||||||||||||||||||||||||
| Market Cap | 39,113,985 | Book Value | 5,012,222 | Comparative Value | 147,268,333 | DCF Value | 892,820,285.60 | |||||||||||||||||||||||||
http://people.stern.nyu.edu/adamodar/New_Home_Page/datafile/wacc.htm *Estimated beta that appropriately reflects the risk of company
http://people.stern.nyu.edu/adamodar/New_Home_Page/datafile/wacc.htm *uses basic weighted cost of capital worksheet from Damodaran/NYU
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/vebitda.html *from list of multiples by industry from NYU
https://www.treasury.gov/resource-center/data-chart-center/interest-rates/pages/textview.aspx?data=yield
** Nouslogic Financial Model 2.11.2021.xls
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Page 24 of 47
Profit & Loss Projections
| Year | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | 5-Year Sum | ||||||||||||||||||
| Hospital Revenue (Installation) | 2,437,614 | 9,489,376 | 14,939,597 | 20,820,417 | 32,323,749 | 80,010,753 | ||||||||||||||||||
| Hospital Revenue (Database) | 210,772 | 2,908,797 | 7,974,702 | 15,364,805 | 26,380,279 | 52,839,354 | ||||||||||||||||||
| Hospital Revenue (Service) | 19,570 | 269,014 | 737,421 | 1,421,323 | 2,440,732 | 4,888,060 | ||||||||||||||||||
| Food Franchise Revenue (Installation) | 500,000 | 2,000,000 | 2,166,667 | 7,000,000 | 12,458,333 | 24,125,000 | ||||||||||||||||||
| Food Franchise Revenue (Database) | 115,714 | 425,000 | 1,300,000 | 2,912,500 | 5,631,250 | 10,384,464 | ||||||||||||||||||
| Food Franchise Revenue (Service) | 1,830 | 55,327 | 288,244 | 877,619 | 2,091,682 | 3,314,702 | ||||||||||||||||||
| Hotel Revenue (Installation) | 135,000 | 540,000 | 1,080,000 | 1,890,000 | 3,105,000 | 6,750,000 | ||||||||||||||||||
| Hotel Revenue (Database) | 10,125 | 114,750 | 351,000 | 786,375 | 1,520,438 | 2,782,688 | ||||||||||||||||||
| Hotel Revenue (Service) | — | 14,938 | 77,826 | 236,957 | 564,754 | 894,475 | ||||||||||||||||||
| Independent Dinning Revenue (Installation) | 1,200,000 | 4,800,000 | 9,600,000 | 9,600,000 | 27,600,000 | 52,800,000 | ||||||||||||||||||
| Independent Dinning Revenue (Database) | 494 | 1,020,000 | 3,120,000 | 6,990,000 | 13,515,000 | 24,645,494 | ||||||||||||||||||
| Independent Dinning Revenue (Service) | 4,393 | 132,786 | 691,786 | 2,106,286 | 5,020,036 | 7,955,286 | ||||||||||||||||||
| Other (Grocery etc..) Revenue (Installation) | 95,000 | 380,000 | 760,000 | 1,219,167 | 2,185,000 | 4,639,167 | ||||||||||||||||||
| Other (Grocery etc..) Revenue (Database) | 7,125 | 80,750 | 247,000 | 525,667 | 1,036,688 | 1,897,229 | ||||||||||||||||||
| Other (Grocery etc..) Revenue (Service) | 348 | 10,512 | 54,766 | 163,630 | 384,535 | 613,792 | ||||||||||||||||||
| RPM Revenue (Installation) | 2,720,000 | 15,150,000 | 20,070,000 | 26,865,000 | 54,000,000 | 118,805,000 | ||||||||||||||||||
| RPM Revenue (Database) | 4,575,488 | 60,165,792 | 152,622,528 | 285,773,448 | 531,436,368 | 1,034,573,624 | ||||||||||||||||||
| Subtotal | 12,033,474 | 97,557,042 | 216,081,537 | 384,553,194 | 721,693,842 | 1,431,919,088 | ||||||||||||||||||
| Financial Summary | ||||||||||||||||||||||||
| (In USD) | ||||||||||||||||||||||||
| COGS - Direct Labor, Referral Fees | (5,545,117 | ) | (47,639,429 | ) | (109,613,289 | ) | (192,123,018 | ) | (343,805,602 | ) | (698,726,454 | ) | ||||||||||||
| Operating Profit | 6,488,357 | 49,917,613 | 106,468,248 | 192,430,176 | 377,888,241 | 733,192,634 | ||||||||||||||||||
| Gross Operating Profit | 53.92 | % | 51.17 | % | 49.27 | % | 50.04 | % | 52.36 | % | 51.20 | % | ||||||||||||
| Expenses (Overhead) | 288,020 | 316,822 | 348,504 | 383,355 | 421,690 | 1,758,391 | ||||||||||||||||||
| Payroll Costs | 1,358,970 | 3,265,350 | 4,491,060 | 4,926,600 | 5,554,920 | 19,596,901 | ||||||||||||||||||
| Marketing | 626,200 | 688,820 | 757,702 | 833,472 | 916,819 | 3,823,014 | ||||||||||||||||||
| EBITDA | 4,215,166 | 45,646,620 | 100,870,982 | 186,286,749 | 370,994,811 | 708,014,329 | ||||||||||||||||||
| EBITDA Margin % | 35.03 | % | 46.79 | % | 46.68 | % | 48.44 | % | 51.41 | % | 49.45 | % | ||||||||||||
| Post EBITDA Adjustments | ||||||||||||||||||||||||
| Tax @ 21% (Loss Carry)/Depreciation/Interest | (885,185 | ) | (9,585,790 | ) | (21,182,906 | ) | (39,120,217 | ) | (77,908,910 | ) | (148,683,009 | ) | ||||||||||||
| Net Income (Free Cash Flow) | 3,329,981 | 36,060,830 | 79,688,075 | 147,166,532 | 293,085,901 | 559,331,320 | ||||||||||||||||||
| NP Margin % | 27.67 | % | 36.96 | % | 36.88 | % | 38.27 | % | 40.61 | % | 39.06 | % | ||||||||||||
Nouslogic Revenue is broken in three separate parts; Installation, Database, and Service. On average, Installation provides the bulk of the Revenue at ~60%, while Database and Service provide ~37% and 3% respectively. After the initial Product & Sales ramp, Revenue growth normalizes at ~88% per year. This high growth is primarily due to RPM Installation & Database Revenue. This Gross Margin Percentage of Nouslogic is ~51%, while the Net Profit Margin is ~39%. The highest Operating Expense is Payroll, which decreases as a percent of Revenue due to operational efficiency. The total Effective Tax Rate is estimated to be ~21% per year.
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Page 25 of 47
Hoang Nhu, Co-Founder & Chief Technology Officer
| ● | 30+ years in technology and communications industries | |
| ● | Previously held executive engineering positions for companies including Hewlett Packard & Broadcom | |
| ● | Numerous patents in IT space including multiple to support Nouslogic’s Healthcare Event Management System | |
| ● | Undergraduate engineering degree from California Polytech, graduate engineering degree from University of Washington |
Dr. Vu Theriot, Co-Founder, President, & Chief Medical Officer
| ● | 25+ years of experience in family medicine | |
| ● | Expertise in communicable disease | |
| ● | Undergraduate Chemical Engineering degree from the University of Houston | |
| ● | MD from the Baylor College of Medicine |
Gavin West, Business Advisor, Incoming CEO
| ● | 20+ years of leadership experience in both Fortune 500 and early stage companies | |
| ● | Led/advised Gen1 Research, Hydor Healthcare, PerSys Medical, Envoy Medical, Revent Medical | |
| ● | Undergraduate degree from the United States Naval Academy | |
| ● | Graduate of Johns Hopkins Carey School of Business | |
| ● | Former Marine Officer with multiple combat tours in infantry, intel, and special operations roles |
RISK FACTORS
The overall risk for entry into the RTLS segment is relatively low compared to other offerings in the healthcare sector. As an FDA Exempt device that does not directly interact with patients, even though it contributes to their wellbeing, HEMS has no FDA reporting or compliance requirements. This is a marked advantage over other entries into patient management and significantly reduces the risk of recall, lawsuit, and general consumer scrutiny.
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Page 26 of 47
| Nouslogic Capitalization Table | ||||||||||||||||||||
| Shareholder | Founders / F&F | Seed | Seies A | Total | Percent of Total | |||||||||||||||
| Hoang Nhu | 350,000 | 350,000 | 36.45 | % | ||||||||||||||||
| Vu Theriot | 150,000 | 150,000 | 15.62 | % | ||||||||||||||||
| Other Investors | 64,751 | 64,751 | 6.74 | % | ||||||||||||||||
| Compay Incentvie Pool (Unassigned) | 200,000 | 200,000 | 20.83 | % | ||||||||||||||||
| Gustavo Artaza | 30,942 | 30,942 | 3.22 | % | ||||||||||||||||
| Manual Solis | 29,395 | 29,395 | 3.06 | % | ||||||||||||||||
| Series A (Current Offering) | 135,000 | 135,000 | 14.06 | % | ||||||||||||||||
| Total | 564,751 | 60,337 | 335,000 | 960,088 | 100.00 | % | ||||||||||||||
Source: Nouslogic Corporate Governance Documents
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Page 27 of 47
NOUSLOGIC HEALTHCARE INC
Financial Statements For The Year Ended December 31, 2019 & 2018
TOGETHER WITH INDEPENDENT ACCOUNTANT AUDIT REPORT
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Page 28 of 47
TABLE OF CONTENTS
| Description | |
| Independent Accountant Audit Report | |
| Profit & Loss Statement | |
| Balance sheet | |
| Statement of Cashflows | |
| Notes to Accompanied Financial Statements |
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Page 29 of 47
INDEPENDENT ACCOUNTANT AUDIT REPORT
To the Board of Directors of NOUSLOGIC HEALTHCARE INC
We have audited the accompanying financial statements of NOUSLOGIC HEALTHCARE INC which comprise the Balance Sheets as of December 31, 2019 and December 31, 2018, and the related Profit & Loss Statements, and Statement of Cashflows for the years then ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that a re free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Auditor’s Conclusion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of NOUSLOGIC HEALTHCARE INC as of December 31, 2018 and December 31,2018, and the results of its operations and its cash flows for the period then ended in accordance with accounting principles generally accepted in the United States of America.
Omar Alnuaimi, CPA
Naperville,
IL
February 9, 2021
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Page 30 of 47
NOUSLOGIC HEALTHCARE INC
PROFIT & LOSS STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2019 & 2018
| 2019 | 2018 | |||||||
| Revenue | ||||||||
| Sales | 25,975 | 2,222 | ||||||
| Total Revenue | 25,975 | 2,222 | ||||||
| Gross Profit | 25,975 | 2,222 | ||||||
| Operating Expense | ||||||||
| Advertising & Marketing Expense | 836 | 1,522 | ||||||
| Bank & Merchant Fees | 1,008 | 40 | ||||||
| Computer & Software Expense | 711 | — | ||||||
| Supplies (Manufacturing) Expense | 45,797 | 50,477 | ||||||
| Meals and Entertainment | 100 | 22 | ||||||
| Membership & Subscription Expense | 343 | — | ||||||
| Outside Labor - Subcontractors | 187,920 | 191,455 | ||||||
| Postage & Shipping Expense | 1,953 | 931 | ||||||
| Professional Fees | — | 7,883 | ||||||
| Professional Fees - Consulting | 27,107 | 44,690 | ||||||
| Professional Fees - Legal | 5,693 | — | ||||||
| Supplies Expense | 2,378 | 3,312 | ||||||
| Taxes & Licenses | 6,385 | 1,097 | ||||||
| Travel Expense | — | 469 | ||||||
| Utilities Expense | 424 | 173 | ||||||
| Total Operating Expenses | 280,655 | 302,072 | ||||||
| Net Income From Operations | (254,680 | ) | (299,850 | ) | ||||
| Other Income (Expense) | ||||||||
| Depreciation & Amortization | (215 | ) | (215 | ) | ||||
| Misc. Expense | (2,922 | ) | (2,758 | ) | ||||
| Interest Income | 1,602 | 968 | ||||||
| Net Income Before Provision for Income Tax | (256,215 | ) | (301,854 | ) | ||||
| Provision for Income Taxes | — | — | ||||||
| Net Income (Loss) | $ | (256,215 | ) | $ | (301,854 | ) | ||
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Page 31 of 47
NOUSLOGIC HEALTHCARE INC
BALANCE SHEET
DECEMBER 31, 2019 & DECEMBER 31, 2018
| 12/31/19 | 12/31/18 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and Cash Equivalents | $ | 40,267 | $ | 296,566 | ||||
| Other Current Assets | 2,040 | 1,957 | ||||||
| TOTAL CURRENT ASSETS | 42,307 | 298,523 | ||||||
| NON-CURRENT ASSETS | ||||||||
| Fixed Assets - Equipment | 2,579 | 2,579 | ||||||
| Less: Accumulated Depreciation | (215 | ) | (215 | ) | ||||
| Fixed Assets - Equipment (net) | 2,364 | 2,364 | ||||||
| TOTAL NON-CURRENT ASSETS | 2,364 | 2,364 | ||||||
| TOTAL ASSETS | 44,671 | 300,887 | ||||||
| LIABILITIES AND OWNER'S EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| TOTAL CURRENT LIABILITIES | — | — | ||||||
| NON-CURRENT LIABILITIES | ||||||||
| TOTAL NON-CURRENT LIABILITIES | — | — | ||||||
| TOTAL LIABILITIES | — | — | ||||||
| OWNER'S EQUITY | ||||||||
| Common Stock ($0.001 par value, 825,008 shares issued and outstanding, 1,000,000 authorized) | 825 | 825 | ||||||
| Common Stock - APIC | 1,224,175 | 1,224,175 | ||||||
| Retained Earnings (Deficit) | (924,113 | ) | (622,259 | ) | ||||
| Net Income (Loss) | (256,215 | ) | (301,854 | ) | ||||
| TOTAL SHAREHOLDERS' EQUITY | 44,671 | 300,887 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 44,671 | $ | 300,887 | ||||
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Page 32 of 47
NOUSLOGIC HEALTHCARE INC
STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED DECEMBER 31, 2019 & 2018
| 2019 | 2018 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net Income | $ | (256,215 | ) | $ | (301,854 | ) | ||
| Non-Cash Adjustments | ||||||||
| Increase in Accumulated Deprecation | 215 | 215 | ||||||
| Increase in Other Current Assets | (83 | ) | (567 | ) | ||||
| Other Adjustments | (216 | ) | ||||||
| Decrease in Company Credit Card | — | (2,740 | ) | |||||
| NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES | (256,299 | ) | (304,947 | ) | ||||
| INVESTING ACTIVITIES | ||||||||
| — | — | |||||||
| NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES | — | — | ||||||
| FINANCING ACTIVITIES | ||||||||
| — | — | |||||||
| NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES | — | — | ||||||
| NET INCREASE (DECREASE) IN CASH | (256,299 | ) | (304,947 | ) | ||||
| CASH AT BEGINNING OF PERIOD | 296,566 | 601,513 | ||||||
| CASH AT END OF PERIOD | $ | 40,267 | $ | 296,566 | ||||
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Page 33 of 47
NOUSLOGIC HEALTHCARE INC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019 & 2018
NOTE A – ORGANIZATION AND NATURE OF ACTIVITIES
NOUSLOGIC HEALTHCARE INC (the “Company”) is a medical services provider/supplier in the Real Time Location Service (RTLS) market. The Company specializes in BLE (Blue Tooth Low Energy) mesh network which creates a Healthcare Event Management System capable of monitoring and enforcing compliance for critical hospital events such as infection control protocols (hand washing) and remote patient monitoring. The system is also tailored and scalable for immediate deployment in the Food Service / Hospitality market to take advantage of market trends post COVID -19 health compliance requirements.
NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). As a result, the Company records revenue when earned and expenses when incurred.
Use of Estimates
The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosures of contingent assets and liabilities and other items, as well as the reported revenues and expenses. Actual results could differ from those estimates.
Risks and Uncertainties
The Company has a limited operating history. The Company’s business and operations are sensitive to general business and economic conditions in the United States. A host of factors beyond the Company’s control could cause fluctuations in these conditions. Adverse conditions may include, recession, downturn or otherwise, local competition or changes in consumer taste. These adverse conditions could affect the Company’s financial condition and the results of its operations.
Cash and Cash Equivalents
Cash and any cash equivalents include all cash balances, and highly liquid investments with maturities of three months or less when purchased
Property and Equipment (Fixed Assets)
Purchase of property and equipment are recorded at cost. Improvements and replacements of property and equipment are capitalized. All direct labor costs that have been identified in the installation or modification of specific equipment are capitalized. Maintenance and repairs that do not improve or extend the lives of property and equipment are charged to expense as incurred.
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Page 34 of 47
NOUSLOGIC HEALTHCARE INC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019 & 2018
NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Revenue Recognition
Revenues are primarily derived from franchise fees (one-time and recurring fees) and training and support fees collected from franchisees. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, or services have been rendered, the seller’s price to the buyer is fixed or determinable, and collectability is reasonable assured. The determination of whether fees and fixed or determinable and collection is reasonable assured involves the use of assumptions. Arrangement terms and customer information are evaluated to ensure that these criteria are met prior to recognition of revenue.
Income Taxes
The Company applies ASC 740 Income Taxes (“ASC 740”). Deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial statement reported amounts at each period end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax expense for the period, if any and the change during the period in deferred tax assets and liabilities. ASC 740 also provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. A tax benefit from an uncertain position is recognized only if it is “more likely than not” that the position is sustainable upon examination by the relevant taxing authority based on its technical merit.
The Company is subject to tax filing requirements as a corporation in the federal jurisdiction of the United States. The Company sustained net operating losses during fiscal year 2019 & 2018. Net operating losses will be carried forward to reduce taxable income in future years. Due to management’s uncertainty as to the timing and valuation of any benefits associated with the net operating loss carryforwards, the Company has elected to recognize an allowance to account for them in the financial statements but has fully reserved it. Under current law, net operating losses may be carried forward indefinitely.
Advertising Expenses
The Company expenses advertising costs as they are incurred.
Commitments and Contingencies
The Company is not currently involved with and does not know of any pending or threatening litigation against the Company or its members
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Page 35 of 47
NOUSLOGIC HEALTHCARE INC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2019 & 2018
NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Sales Taxes
The Company records sales and other taxes collected from customers and subsequently remitted to government authorities as accounts receivable with a corresponding offset to sales tax payable. The Company removes the sales tax payable balances from the balance sheet as cash is collected from the customer and remitted to the tax authority.
NOTE C – EQUITY
Common Stock
Under the articles of incorporation, the total number of common shares of stock that the Corporation shall have authority to issue is one million shares (1,000,000), all of which consist of shares of Class A Common Stock, $0.001 par value per share. As of December 31, 2019 & 2018, 825,008 shares have been issued and are outstanding.
NOTE D – CONCENTRATIONS OF RISK
Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents. The Company places its cash and any cash equivalents with a limited number of high-quality financial institutions and do not exceed the amount of insurance provided on such deposits.
NOTE E – SUBSEQUENT EVENTS
Management has evaluated subsequent events through February 9, 2021, the date on which the financial statements were available to be issued. Management has determined that none of the events occurring after the date of the balance sheet through the date of Management’s review substantially affect the amounts and disclosure of the accompanying financial statements.
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Page 36 of 47
NOUSLOGIC HEALTHCARE INC
Financial Statements For The Year Ended December 31, 2020
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Page 37 of 47
TABLE OF CONTENTS
| Description | |
| Independent Accountant Letter | |
| Profit & Loss Statement | |
| Balance Sheet | |
| Statement of Cashflows | |
| Notes to Accompanied Financial Statements |
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Page 38 of 47
INDEPENDENT ACCOUNTANT LETTER
To the Board of Directors of NOUSLOGIC HEALTHCARE INC
Management is responsible for the accompanying financial statements of NOUSLOGIC HEALTHCARE INC which comprise the Balance Sheets as of December 31,2020, and the related Profit & Loss Statements, and Statement of Cashflows for the years then ended, and the related notes to the financial statements in accordance with accounting principles generally accepted in the United States of America. I have performed a compilation engagement in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. I did not audit or review the financial statements nor was I required to perform any procedures to verify the accuracy or completeness of the information provided by management Accordingly, I do not express an opinion, a conclusion, nor provide any form of assurance on these financial statements.
Omar Alnuaimi, CPA
Naperville, lL
February 9, 2021
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Page 39 of 47
NOUSLOGIC HEALTHCARE INC
PROFIT & LOSS STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2020
| Revenue | ||||
| Sales | 48,375 | |||
| Sales - RPM Devices | 26,114 | |||
| Total Revenue | 74,489 | |||
| Gross Profit | 74,489 | |||
| Operating Expense | ||||
| Computer & Software Expense | 1,044 | |||
| Supplies (Manufacturing) Expense | 970 | |||
| Outside Labor - Subcontractors | 65,163 | |||
| Postage & Shipping Expense | 1,064 | |||
| Professional Fees | 25,000 | |||
| Professional Fees - Consulting | 36,000 | |||
| Supplies Expense | 5,453 | |||
| Taxes & Licenses | 6,450 | |||
| Total Operating Expenses | 141,144 | |||
| Net Income From Operations | (66,655 | ) | ||
| Other Income (Expense) | ||||
| Depreciation & Amortization | (215 | ) | ||
| Misc. Expense | (245 | ) | ||
| Interest Income | 59 | |||
| Net Income Before Provision for Income Tax | (67,056 | ) | ||
| Provision for Income Taxes | — | |||
| Net Income (Loss) | $ | (67,056 | ) | |
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Page 40 of 47
NOUSLOGIC HEALTHCARE INC
BALANCE SHEET
DECEMBER 31, 2020
| ASSETS | ||||
| CURRENT ASSETS | ||||
| Cash and Cash Equivalents | $ | 7,050 | ||
| Other Current Assets | 2,201 | |||
| TOTAL CURRENT ASSETS | 9,251 | |||
| NON-CURRENT ASSETS | ||||
| Fixed Assets - Equipment | 2,579 | |||
| Less: Accumulated Depreciation | (215 | ) | ||
| Fixed Assets - Equipment (net) | 2,364 | |||
| TOTAL NON-CURRENT ASSETS | 2,364 | |||
| TOTAL ASSETS | 11,615 | |||
| LIABILITIES AND OWNER'S EQUITY | ||||
| CURRENT LIABILITIES | ||||
| Loan Due to Shareholders | 34,000 | |||
| TOTAL CURRENT LIABILITIES | 34,000 | |||
| NON-CURRENT LIABILITIES | ||||
| TOTAL NON-CURRENT LIABILITIES | — | |||
| TOTAL LIABILITIES | 34,000 | |||
| OWNER'S EQUITY | ||||
| Common Stock ($0.001 par value, 825,008 shares issued and outstanding, 1,000,000 authorized) | 825 | |||
| Common Stock - APIC | 1,224,175 | |||
| Retained Earnings (Deficit) | (1,180,329 | ) | ||
| Net Income (Loss) | (67,056 | ) | ||
| TOTAL SHAREHOLDERS' EQUITY | (22,385 | ) | ||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 11,615 | ||
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Page 41 of 47
NOUSLOGIC HEALTHCARE INC
STATEMENT OF CASHFLOWS
FOR THE YEAR ENDED DECEMBER 31, 2020
| OPERATING ACTIVITIES | ||||
| Net Income | $ | (67,056 | ) | |
| Non-Cash Adjustments | ||||
| Increase in Accumulated Deprecation | 215 | |||
| Increase in Other Current Assets | (161 | ) | ||
| Other Adjustments | (4,619 | ) | ||
| NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES | (71,621 | ) | ||
| INVESTING ACTIVITIES | ||||
| — | ||||
| NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES | — | |||
| FINANCING ACTIVITIES | ||||
| Loan Due to Shareholders - Proceeds | 34,000 | |||
| NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES | 34,000 | |||
| NET INCREASE (DECREASE) IN CASH | (37,621 | ) | ||
| CASH AT BEGINNING OF PERIOD | 44,671 | |||
| CASH AT END OF PERIOD | $ | 7,050 | ||
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Page 42 of 47
NOUSLOGIC HEALTHCARE INC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
NOTE A – ORGANIZATION AND NATURE OF ACTIVITIES
NOUSLOGIC HEALTHCARE INC (the “Company”) is a medical services provider/supplier in the Real Time Location Service (RTLS) market. The Company specializes in BLE (Blue Tooth Low Energy) mesh network which creates a Healthcare Event Management System capable of monitoring and enforcing compliance for critical hospital events such as infection control protocols (hand washing) and remote patient monitoring. The system is also tailored and scalable for immediate deployment in the Food Service / Hospitality market to take advantage of market trends post COVID -19 health compliance requirements.
NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). As a result, the Company records revenue when earned and expenses when incurred.
Use of Estimates
The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosures of contingent assets and liabilities and other items, as well as the reported revenues and expenses. Actual results could differ from those estimates.
Risks and Uncertainties
The Company has a limited operating history. The Company’s business and operations are sensitive to general business and economic conditions in the United States. A host of factors beyond the Company’s control could cause fluctuations in these conditions. Adverse conditions may include, recession, downturn or otherwise, local competition or changes in consumer taste. These adverse conditions could affect the Company’s financial condition and the results of its operations.
Cash and Cash Equivalents
Cash and any cash equivalents include all cash balances, and highly liquid investments with maturities of three months or less when purchased
Property and Equipment (Fixed Assets)
Purchase of property and equipment are recorded at cost. Improvements and replacements of property and equipment are capitalized. All direct labor costs that have been identified in the installation or modification of specific equipment are capitalized. Maintenance and repairs that do not improve or extend the lives of property and equipment are charged to expense as incurred.
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Page 43 of 47
NOUSLOGIC HEALTHCARE INC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Revenue Recognition
Revenues are primarily derived from franchise fees (one-time and recurring fees) and training and support fees collected from franchisees. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, or services have been rendered, the seller’s price to the buyer is fixed or determinable, and collectability is reasonable assured. The determination of whether fees and fixed or determinable and collection is reasonable assured involves the use of assumptions. Arrangement terms and customer information are evaluated to ensure that these criteria are met prior to recognition of revenue.
Income Taxes
The Company applies ASC 740 Income Taxes (“ASC 740”). Deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial statement reported amounts at each period end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax expense for the period, if any and the change during the period in deferred tax assets and liabilities. ASC 740 also provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. A tax benefit from an uncertain position is recognized only if it is “more likely than not” that the position is sustainable upon examination by the relevant taxing authority based on its technical merit.
The Company is subject to tax filing requirements as a corporation in the federal jurisdiction of the United States. The Company sustained net operating losses during fiscal year 2019 & 2018. Net operating losses will be carried forward to reduce taxable income in future years. Due to management’s uncertainty as to the timing and valuation of any benefits associated with the net operating loss carryforwards, the Company has elected to recognize an allowance to account for them in the financial statements but has fully reserved it. Under current law, net operating losses may be carried forward indefinitely.
Advertising Expenses
The Company expenses advertising costs as they are incurred.
Commitments and Contingencies
The Company is not currently involved with and does not know of any pending or threatening litigation against the Company or its members
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| 555 Montgomery Street, Suite 1501 | T +1 415 889 1010 |
| San Francisco, CA 94111 | F +1 415 358 5665 |
Page 44 of 47
NOUSLOGIC HEALTHCARE INC
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2020
NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Sales Taxes
The Company records sales and other taxes collected from customers and subsequently remitted to government authorities as accounts receivable with a corresponding offset to sales tax payable. The Company removes the sales tax payable balances from the balance sheet as cash is collected from the customer and remitted to the tax authority.
NOTE C – EQUITY
Common Stock
Under the articles of incorporation, the total number of common shares of stock that the Corporation shall have authority to issue is one million shares (1,000,000), all of which consist of shares of Class A Common Stock, $0.001 par value per share. As of December 31, 2019 & 2018, 825,008 shares have been issued and are outstanding.
NOTE D – DEBT
The Company has three short-term debt instruments. The first instrument is a loan due to shareholder in the amount of $4,000 @ 0% (annual), commenced on July 16, 2020. The second instrument is a loan due to shareholder in the amount of $25,000 @ 0% (annual), commenced on August 14, 2020. The third instrument is a loan due to shareholder in the amount of $5,000 @ 0% (annual), commenced on November 23, 2020. All three loans total to $34,000 and are due in full within 10 working days upon the completion of company’s anticipated capital raise in 2021.
NOTE E – CONCENTRATIONS OF RISK
Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents. The Company places its cash and any cash equivalents with a limited number of high-quality financial institutions and do not exceed the amount of insurance provided on such deposits.
NOTE F – SUBSEQUENT EVENTS
Management has evaluated subsequent events through February 9, 2021, the date on which the financial statements were available to be issued. Management has determined that none of the events occurring after the date of the balance sheet through the date of Management’s review substantially affect the amounts and disclosure of the accompanying financial statements.
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Page 45 of 47
PART III – EXHIBITS
| Exhibit 1.1 | Underwriting Agreement | |
| Exhibit 2.1 | Articles of Incorporation* | |
| Exhibit 2.2 | Bylaws* | |
| Exhibit 4.1 | Form of Subscription Agreement | |
| Exhibit 8.1 | Escrow Agreement | |
| Exhibit 12.1 | Opinion of Sances Law | |
| Exhibit 13.1 | Executive Summary | |
| Exhibit 13.2 | Information Deck | |
| Exhibit 16.1 | Additional Disclosures |
*Previously Filed
Pursuant to the requirements of Regulation A, the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form 1-A and has duly caused this offering statement to be signed on March 5, 2021.
Nouslogic, Inc.
| By: | /s/ Gavin West | |
| Gavin West, Chief Executive Officer | ||
This offering statement has been signed by the following persons in the capacities and on the dates indicated.
| Name | Position | Date | ||
| /s/ Gavin West | CEO | March 5, 2020 | ||
| Gavin West |
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Page 46 of 47
For more information, please contact our investor relations team : Pankaj Vashisth at pv@uscapglobal.com
Securities offered through US Capital Global Securities LLC (“USCGS”), a SEC Registered Broker Dealer and member of FINRA and SIPC. The information has been obtained from the company referenced and does not purport to be complete. USCGS makes no representations or warranties, as to the accuracy, timeliness or completeness of the information. This does not constitute a solicitation of an offer to purchase any security. Any such offer or solicitation shall be made only pursuant to the confidential private placement memorandum. This document is intended solely for the addressee(s) and may not be redistributed without the prior permission of USCGS. View USCGS’ Form CRS at www.uscgs.com/crs.html.
© US Capital Global Securities, LLC. All rights reserved.
US Capital Global Investment Management, LLC
555 Montgomery Street, Suite 1501
San Francisco, CA 94111
Securities offered through US Capital Global Securities, LLC, member FINRA, SIPC.
Loans made or arranged pursuant to a California Finance Lenders Law License.
License No. 60DBO 43589
© US Capital Global Investment Management, LLC. All rights reserved.
052103ESA
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Page 47 of 47
