0001682391-16-000010.txt : 20160920
0001682391-16-000010.hdr.sgml : 20160920
20160919183843
ACCESSION NUMBER: 0001682391-16-000010
CONFORMED SUBMISSION TYPE: 1-A/A
PUBLIC DOCUMENT COUNT: 10
FILED AS OF DATE: 20160920
DATE AS OF CHANGE: 20160919
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: Sensory Performance Technology, Inc
CENTRAL INDEX KEY: 0001682391
STANDARD INDUSTRIAL CLASSIFICATION: [3949]
IRS NUMBER: 813325583
STATE OF INCORPORATION: DE
FISCAL YEAR END: 0101
FILING VALUES:
FORM TYPE: 1-A/A
SEC ACT: 1933 Act
SEC FILE NUMBER: 024-10600
FILM NUMBER: 161892727
BUSINESS ADDRESS:
STREET 1: 26 E. 12TH STREET
CITY: LINDEN
STATE: NJ
ZIP: 07036
BUSINESS PHONE: 616-502-7296
MAIL ADDRESS:
STREET 1: 26 E. 12TH STREET
CITY: LINDEN
STATE: NJ
ZIP: 07036
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EX1A-2A CHARTER
2
spt-articles2.txt
SPT ARTICLES OF INCORPORATION
State of Delaware
Secretary of State
Division of Corporations
Delivered 12:30 PM
01/14/2016
FILED 12:30 PM 01/14/2016
SR 20160219283 - File Number 5936817
CERTIFICATE OF INCORPORATION OF SENSORY
PERFORMANCE TECHNOLOGY INC.
The undersigned, a natural person (the Sole
incorporator) for the purpose of organizing
a corporation to conduct the business and
promote the purposes hereinafter stated,
under the provisions and subject to the
requirements of the laws of the State of
Delaware hereby certifies that:
ARTICLE I
The name of this corporation is Sensory
Performance Technology Inc.
ARTICLE II
The registered office of the corporation in
the State of Delaware shall be 2711
Centerville Road, Suite 400, in the City of
Wilmington, County of New Castle, 19808, and
the name of the registered agent of the
corporation in the State of Delaware at such
address Corporation Service Company.
ARTICLE III
The purpose of this corporation is to engage
in any lawful act or activity for which a
corporation may be organized under the
Delaware General Corporation Law.
ARTICLE IV
The total number of shares of capital stock
which this corporation is authorized to
issue, is: One Thousand 1, OOO) shares, each
having a par value of $0.0001.
ARTICLE V
The name and the mailing address of the Sole
incorporator is as follows: Daryl Davis,
Esq.
200 Rudolph Avenue
Huntsville, AL 35801
ARTICLE VI
In furtherance of and not in limitation of
the powers conferred by the laws of the
state of Delaware the Board of Directors of
the Corporation is expressly authorized to
make, amend or repeal Bylaws of the
Corporation.
The business and affairs of the Corporation
shall be managed by or under the direction
of the Board of Directors. Elections of
directors need not be by written ballot
unless otherwise provided in the Bylaws of
the Corporation.
ARTICLE VII
A Director of the corporation shall not be
personally liable to the corporation or its
stockholders for monetary damages for breach
of fiduciary duty as a director, except for
liability (i) for any breach of the
Director?s duty of loyalty to the
corporation or its stockholders, (ii) for
acts or omissions not in good faith or which
involve intentional misconduct or a knowing
violation of law, (iii) under Section 174
of the Delaware General Corporation Law, or
(iv) for any transaction from which the
director derived any improper personal
benefit If the Delaware General Corporation
Law is amended after the effective date of
this Certificate of Incorporation to
authori; corporate action further
eliminating or limiting the personal
liability of directors. then the liability
of E, director of the corporation shall be
eliminated or limited to the fullest extent
permitted by the General Corporation Law of
t.1'1e State of Delaware. No amendment,
modification or repeal of this Article VU
shall adversely affect the rights and
protection afforded to a Director of the
corporation under this Article Vll for acts
or omissions occurring prior to such
amendment. modification or repeal.
ARTICLE VIII
The Corporation reserves the right to amend,
alter, change or repeal any provision
contained in this Certificate of
Incorporation, in the manner now or
hereafter prescribed by statute, and all
rights invested upon the stockholders herein
are granted subject to this reservation.
/Remainder of this page intentionally left
blank/
?
In WITNESS WHEREOF. this Certificate has
been subscribed as of December 20, 2015 by
the undersigned affirms that the statements
made herein are true and correct.
Daryl Davis
Sole Incorporator
EX1A-2B BYLAWS
3
spt-bylaws.txt
SPT BYLAWS
SENSORY PERFORMANCE TECHNOLOGY, INC
(a Delaware corporation) BYLAWS
TABLE OF CONTENTS
Page
ARTICLE I - SHAREHOLDERS 1
Section 1.01 Annual Meetings 1
Section 1.02 Special Meetings 1
Section 1.03 Notice of Meetings 1
Section 1.04 Attendance at Meeting 1
Section 1.05 Quorum 2
Section 1.06 Shareholder to Vote in Person
or by Proxy 2
Section 1.07 Shareholder to Have One Vote
Per Share 2
Section 1.08 Action by Less than Unanimous
Written Consent 2
Section 1.09 Shareholder List 2
Section 1.10 Inspectors at Shareholders?
Meetings 3
Section 1.11 Participation by
Communication Equipment 3
Section 1.12 Shareholder Proposals 3
ARTICLE II - BOARD OF DIRECTORS 4
Section 2.01 General Powers 4
Section 2.02 Number and Term of Office
4
Section 2.03 Election of Directors 4
Section 2.04 Annual and Regular Meetings
4
Section 2.05 Special Meetings; Notice 4
Section 2.06 Quorum 4
Section 2.07 Participation by
Communication Equipment 5
Section 2.08 Action Without a Meeting 5
Section 2.09 Resignation and Removal of
Directors 5
Section 2.10 Vacancies and Newly Created
Directorships 5
Section 2.11 Compensation 5
Section 2.12 Committees 5
Section 2.13 Powers of Committees 5
Section 2.14 Discharge of Duties; Reliance
on Reports 6
Section 2.15 Certain Transactions 6
ARTICLE III - OFFICERS 7
Section 3.01 Officers of the Corporation
7
Section 3.02 Election 7
Section 3.03 Removal or Resignation of
Officers 7
Section 3.04 Duties of the Chairman of the
Board 7
Section 3.05 Duties of the President 7
Section 3.06 Duties of the Vice President
7
Section 3.07 Duties of the Secretary 8
Section 3.08 Duties of the Treasurer 8
Section 3.09 Employee Bonds 8
Section 3.10 Discharge of Duties; Reliance
on Reports 8
Section 3.11 Interested Transactions 8
ARTICLE IV - EXECUTION OF INSTRUMENTS,
DEPOSITS, VOTING OF SECURITIES 8
Section 4.01 General 8
Section 4.02 Corporate Indebtedness 8
Section 4.03 Checks or Drafts 8
Section 4.04 Deposits 9
Section 4.05 Appointment of Agents to Vote
Securities and Other Corporations 9
ARTICLE V - CAPITAL STOCK 9
Section 5.01 Stock Certificates 9
Section 5.02 Uncertificated Stock 9
Section 5.03 Transfer of Stock 9
Section 5.04 Record Date 10
Section 5.05 Registered Shareholders 10
Section 5.06 Lost Certificates 10
ARTICLE VI - INDEMNIFICATION OF OFFICERS,
DIRECTORS,
EMPLOYEES AND AGENTS 11
Section 6.01 Indemnification of Directors
and Officers-Claims by
Third Parties 11
Section 6.02 Indemnification of Directors
and Officers-Claims Brought
By or In the Right of the Corporation 11
Section 6.03 Approval of Indemnification
11
Section 6.04 Advancement of Expenses 12
Section 6.05 Court Approval 13
Section 6.06 Partial Indemnification 13
Section 6.07 Indemnification of Employees
and Agents 13
Section 6.08 Other Rights of
Indemnification 13
Section 6.09 Contract With the Corporation
13
Section 6.10 Definitions 13
Section 6.11 Application to a Resulting or
Surviving Corporation or Constituent
Corporation 14
Section 6.12 Enforcement 14
Section 6.13 Severability 14
Section 6.14 Liability Insurance 15
ARTICLE VII - GENERAL PROVISIONS 15
Section 7.01 Dividends 15
Section 7.02 Reserves 15
Section 7.03 Fiscal Year 15
Section 7.04 Offices 15
Section 7.05 Books and Records 15
Section 7.06 Amendments 15
ARTICLE VIII - INTERPRETATION 16
Section 8.01 Conflict With Statute 16
Section 8.02 Headings 16
SENSORY PERFORMANCE TECHNOLGY, INC. BYLAWS
ARTICLE I - SHAREHOLDERS
Section 1.01 Annual Meetings. The annual
meetings of the Shareholders of the
Corporation (the ?Shareholders?) for the
election of Directors and for the
transaction of such other business as may
properly come before the meeting shall be
held at the corporate offices or any other
place either in or outside the State of New
Jersey as specified by the Directors and at
1 p.m. on the first (1st) Monday of May of
each year (or, if such is a legal holiday,
then on the next succeeding business day),
or at any other time and date as shall be
fixed from time to time by resolution of the
Board of Directors (the ?Board?).
Section 1.02 Special Meetings. Special
meetings of the Shareholders may be called
at any time by the Board or by the Chairman
of the Board, or the President of the
Corporation. Shareholders owning two-thirds
(2/3rds) of the corporation?s shares of
voting stock may also request a special
meeting and the Directors shall grant such a
request. Special meetings of the
Shareholders shall be held at places in or
outside the State of New Jersey, as shall be
specified in the notice or waiver of notice
thereof. The notice of the special meetings
shall state the purpose of the meeting.
Section 1.03 Notice of Meetings. The
Secretary or any assistant Secretary shall
cause notice of the time, place and purposes
of each meeting of the Shareholders to be
personally delivered or mailed, at least ten
(10) days but not more than sixty (60) days
prior to the meeting, to each Shareholder of
record entitled to vote at the meeting.
Notice shall be deemed given when the
requisite time has elapsed after deposit in
the United States mail addressed to the
address of the Shareholder entitled to vote
at the meeting as revealed on the records of
the Corporation. Notice of a meeting of
Shareholders need not be given to any
Shareholder entitled to vote who signs a
waiver of notice in writing, whether before
or after the time of the meeting, and no
notice need be given to any Shareholder who
owns only non-voting stock or otherwise has
no right to vote at the meeting of the
Shareholders. Notice of any adjourned
meeting of the Shareholders of the
Corporation need not be given if the time
and place to which the meeting is adjourned
are announced at the meeting at which the
adjournment is taken and at the adjourned
meeting only such business is transacted as
might have been transacted at the original
meeting. If after the adjournment the Board
fixes a new record date for the adjourned
meeting, a notice of the adjourned meeting
shall be given to each Shareholder of record
entitled to such notice on the new record
date.
Section 1.04 Attendance at Meeting.
Shareholders owning voting and non-voting
stock are entitled to attend a meeting of
the Shareholders. Attendance of a person at
a meeting of Shareholders in person or by
proxy constitutes: (a) waiver of objection
to lack of notice or defective notice of the
meeting, unless the Shareholder at the
beginning of the meeting objects to holding
the meeting or transacting business at the
meeting; and (b) waiver of objection to
consideration of a particular matter at the
meeting that is not within the purpose or
purposes described in the meeting notice,
unless the Shareholder objects to
considering the matter when it is presented.
Section 1.05 Quorum. Except as otherwise
required by the Delaware General
Corporation Law or the Restated Articles of
Incorporation (the ?Articles?), shares
entitled to cast
a majority of the votes at a meeting of
Shareholders shall be sufficient to
constitute a quorum for the transaction of
business at the meeting. Regardless of
whether a quorum is present, the meeting may
be adjourned by a vote of the shares
present. The Shareholders present in person
or by proxy at such meeting may continue to
do business until adjournment,
notwithstanding the withdrawal of enough
Shareholders to leave less than a quorum. At
the adjourned meeting at which the requisite
number of shares shall be represented, any
business may be transacted which might have
been transacted at the meeting as originally
notified.
Section 1.06 Shareholder to Vote in Person
or by Proxy. A Shareholder entitled to vote
at a meeting of Shareholders or to express
consent or dissent without a meeting shall
be entitled to vote in person, or by proxy
appointed by an instrument in writing
authorizing other persons to act. A proxy
shall be signed by the Shareholder or an
authorized agent or representative and shall
not be valid after the expiration of three
(3) years from its date unless otherwise
provided.
Section 1.07 Shareholder to Have One Vote
Per Share. In accordance with the Articles,
each Shareholder shall have one vote for
each share of preferred stock owned and
having voting power registered on the books
of the Corporation. Except as otherwise
required by the Delaware General Corporation
Law or the Articles, all elections shall be
had and all questions decided by a majority
vote of the shares represented at the
meeting in person or by proxy. There shall
be no cumulative voting.
Section 1.08 Action by Less than Unanimous
Written Consent. Any action required or
permitted by the Delaware General
Corporation Law to be taken at an annual or
special meeting of the Shareholders may be
taken without a meeting, without prior
notice, and without a vote, if consents in
writing, setting forth the action so taken,
are signed by the holders of outstanding
shares having not less than the minimum
number of votes that would be necessary to
authorize or take the action at a meeting at
which all shares entitled to vote on the
action were present and voted. A written
consent shall bear the date of signature of
the Shareholder who signs the consent.
Written consents are not effective to take
corporate action unless within sixty (60)
days after the record date for determining
Shareholders entitled to express consent to
or to dissent from a proposal without a
meeting, written consents dated not more
than ten (10) days before the record date
and signed by a sufficient number of
Shareholders to take the action are
delivered to the Corporation. Delivery shall
be to the Corporation?s registered office,
its principal place of business, or an
officer or agent of the Corporation having
custody of the minutes of the proceedings of
the Shareholders. Delivery made to the
Corporation?s registered office shall be by
hand or by certified or registered mail,
return receipt requested. Prompt notice of
the taking of the corporate action without a
meeting by less than unanimous written
consent shall be given to Shareholders who
would have been entitled to notice of the
Shareholder meeting if the action had been
taken at a meeting and who have not
consented to the action in writing. An
electronic transmission consenting to an
action must comply with Delaware General
Corporation Law.
Section 1.09 Shareholder List. The officer
or agent having charge of the stock transfer
books for shares of the Corporation shall
make and certify a complete list of the
Shareholders entitled to vote at a
Shareholders? meeting or any adjournment
thereof. The list shall:
(a) Be arranged alphabetically within each
class and series, with the address of, and
the number of shares held by, each
Shareholder.
(b) Be produced at the time and place of
the meeting.
(c) Be subject to inspection by any
Shareholder during the whole time of the
meeting.
(d) Be prima facie evidence as to who are
the Shareholders entitled to examine the
list or to vote at the meeting.
If the requirements of this section have not
been complied with, on demand of a
Shareholder in person or by proxy, who in
good faith challenges the existence of
sufficient votes to carry any action at the
meeting, the meeting shall be adjourned
until the requirements are complied with.
Failure to comply with the requirements of
this provision does not affect the validity
of an action taken at the meeting before the
making of such a demand.
Section 1.10 Inspectors at Shareholders?
Meetings. The Board, in advance of a
Shareholders? meeting, may appoint one (1)
or more inspectors to act at the meeting or
any adjournments thereof. If inspectors are
not so appointed, the person presiding at a
Shareholders? meeting may, and on request of
a Shareholder entitled to vote thereat
shall, appoint one (1) or more inspectors.
In case a person appointed fails to appear
or act, the vacancy may be filled by
appointment made by the Board in advance of
the meeting or at the meeting by the person
presiding thereat. The inspectors shall
determine the number of shares outstanding
and the voting power of each, the shares
represented at the meeting, the existence of
a quorum, the validity and effect of
proxies, and shall receive votes, ballots or
consents, hear and determine challenges and
questions arising in connection with the
right to vote, count and tabulate votes,
ballots or consents, determine the result,
and do such acts as are proper to conduct
the election or vote with fairness to all
Shareholders. On request of the person
presiding at the meeting or a Shareholder
entitled to vote thereat, the inspectors
shall make and execute a written report to
the person presiding at the meeting of any
of the facts found by them and matters
determined by them. The report is prima
facie evidence of the facts stated and of
the vote as certified by the inspectors.
Section 1.11 Participation by Communication
Equipment. Unless otherwise restricted by
the Articles, a Shareholder may participate
in a meeting of Shareholders by a conference
telephone or by other similar communications
equipment through which all persons
participating in the meeting may communicate
with the other participants. All
participants shall be advised of the
communications equipment and the names of
the parties in the conference shall be
divulged to all participants. Participation
in a meeting pursuant to this section
constitutes presence in person at the
meeting.
Section 1.12 Shareholder Proposals. A
Shareholder owning voting stock of the
Corporation may present a proposal which the
Shareholder wishes to have presented at a
Shareholders? meeting for a vote by the
Shareholders owning shares of voting stock.
If a Shareholder owning voting stock wishes
to have a proposal presented for Shareholder
action at a Shareholders? Meeting, this
Shareholder shall give prior written notice
to the Corporation?s President and Treasurer
of the Shareholder?s intention to present
the proposal at a Shareholders? meeting and
the notice shall contain the actual language
of the proposal. Upon receipt of the
Shareholder's written notice, the
Corporation shall have ninety (90) days in
which to determine if the Shareholder?s
proposal is a proper subject for Shareholder
action.
ARTICLE II - BOARD OF DIRECTORS
Section 2.01 General Powers. The property,
affairs and business of the Corporation
shall be managed by its Board of Directors.
The Board may exercise all the powers of the
Corporation, whether derived from law or the
Articles. A Director need not be a
Shareholder of the Corporation. The
Directors shall only act as a Board, and the
individual Directors shall have no power as
such.
Section 2.02 Number and Term of Office.
The Board shall consist of not less than
three
(3) and not more than twenty-five (25)
Directors. The number of the initial Board
and it?s Directors shall be determined by
Chairman of the Board Ben White. Thereafter,
the number of Directors shall be fixed from
time to time by resolution of the Board. The
first Board shall hold office until the
first annual meeting of Shareholders. At the
first annual meeting thereafter the
Shareholders owning shares entitled to vote
shall elect Directors to hold office until
the succeeding annual meeting. A Director
shall hold office for the term elected,
until a successor is elected and qualified
or until death, resignation or removal.
Section 2.03 Election of Directors. Except
as otherwise provided in Section 2.10
hereof, the Directors shall be elected
biannually at the annual meeting of the
Shareholders. At the meeting of the
Shareholders for the election of Directors,
provided a quorum is present, the Directors
shall be chosen and elected by a plurality
of the votes validly cast at the election.
Section 2.04 Annual and Regular Meetings.
The annual meeting of the Board, for the
election of officers and for the transaction
of other business as may come before the
meetings, shall be held in each year either
in or outside the State of New Jersey as
soon as possible after the annual meeting of
the Shareholders on the same day and place
as the annual meeting of the Shareholders.
Notice of the annual meeting of the Board
shall not be required. Notice of regular
meetings, if set by resolution of the Board,
need not be given; provided, however, that
in case the Board shall change the time or
place of regular meetings, notice of this
action shall be mailed promptly to each
Director who shall not have been present at
the meeting at which the action was taken.
Section 2.05 Special Meetings; Notice.
Special meetings of the Board shall be held
whenever called by the Chairman of the Board
or by the President, or by any one Director,
at such time and place as may be specified
in the notice or waiver of notice. Special
meetings of the Board may be called on
twenty-four (24) hours? notice to each
Director, given personally or by telephone,
or on three (3) days? notice which shall be
deemed given when deposited in first class
mail or delivered to a recognized national
overnight delivery service. Notice of any
special meeting need not be given to any
Director who shall be present at the
meeting, or who shall waive notice of the
meeting in writing, whether before or after
the time of the meeting. No notice need be
given of any adjourned special meeting.
Section 2.06 Quorum. A majority of the
members of the Board then in office, or of
the members of a committee of the Board,
constitutes a quorum for transaction of
business, unless the Articles or Bylaws, or
in the case of a committee, the Board
resolution establishing the committee,
provide for a larger or smaller number. The
vote of the majority of members present at a
meeting at which a quorum is present
constitutes the action of the Board or of
the committee, unless the vote of a larger
number is required by the Delaware General
Corporation Law, the Articles or the Bylaws,
or in the case of a committee, the Board
resolution establishing the committee.
Section 2.07 Participation by Communication
Equipment. A member of the Board or of a
committee designated by the Board may
participate in a meeting by means of
conference telephone or similar
communications equipment through which all
persons participating in the meeting can
communicate with the other participants.
Participation in a meeting pursuant to this
section constitutes presence in person at
the meeting.
Section 2.08 Action Without a Meeting. Any
action required or permitted to be taken at
any meeting of the Board or a committee of
the Board may be taken without a meeting if,
under authorization voted before or after
the action written consents thereto are
signed by all members of the Board then in
office or of the committee and such written
consents are filed with the minutes of the
proceedings of the Board or committee.
Section 2.09 Resignation and Removal of
Directors. Any Director may resign at any
time by delivering a written resignation to
the Board or any officer of the Corporation
and shall be effective upon receipt thereby
or at a subsequent time as set forth in the
notice of resignation. Any or all of the
Directors may be removed from office at any
time with cause upon the vote for removal of
a majority of the shares entitled to vote at
an election of Directors.
Section 2.10 Vacancies and Newly Created
Directorships. If any vacancies shall occur
in the Board, by reason of death,
resignation, removal or otherwise, or if the
authorized number of Directors shall be
increased, the Directors then in office
shall continue to act, and the vacancies
shall be filled by vote of a majority of the
Directors then in office, though less than a
quorum; provided, however, that a Director
appointed to fill such vacancy shall only
hold office until the next election of
Directors by the Shareholders.
Section 2.11 Compensation. The Board, by
affirmative vote of a majority of Directors
in office and irrespective of any personal
interest of any of them, may establish
reasonable compensation of Directors for
services to the Corporation as Directors or
officers, but approval of the Shareholders
is required if the Articles, Bylaws or the
Delaware General Corporation Law so provide.
Section 2.12 Committees. The Board may
designate one (1) or more committees, each
committee to consist of one (1) or more of
the Directors of the Corporation and such
non-Directors as the Board may appoint. The
Board may designate one (1) or more
Directors as alternate members of a
committee, who may replace an absent or
disqualified member at a meeting of the
committee. The Board may also appoint such
non-Directors as members of a committee,
except for the executive committee which
shall consist solely of members who are
Directors. In the absence or
disqualification of a member of a committee,
the members thereof present at a meeting and
not disqualified from voting, whether or not
they constitute a quorum, may unanimously
appoint another member of the Board to act
at the meeting in place of such absent or
disqualified member. A committee, and each
member thereof, shall serve at the pleasure
of the Board.
Section 2.13 Powers of Committees. A
committee, to the extent provided in the
resolution of the Board, may exercise all
powers and authority of the Board in
management of the business and affairs of
the Corporation, including the power or
authority to declare a distribution or
dividend, or to authorize the issuance of
stock; provided, however, a committee does
not have the power or authority to do any of
the following:
(a) Amend the Articles.
(b) Adopt an agreement of merger or share
exchange.
(c) Recommend to Shareholders the sale,
lease, or exchange of all or substantially
all of the Corporation?s property and
assets.
(d) Recommend to Shareholders a dissolution
of the Corporation or a revocation of a
dissolution.
(e) Amend the Bylaws of the Corporation.
(f) Fill vacancies in the Board.
Section 2.14 Discharge of Duties; Reliance
on Reports. A Director shall discharge his
or her duties as a Director including the
duties as a member of a committee in the
following manner: (i) in good faith; (ii)
with the care an ordinarily prudent person
in a like position would exercise under
similar circumstances; and (iii) in a manner
he or she reasonably believes to be in the
best interests of the Corporation. In
discharging the duties, a Director is
entitled to rely on information, opinions,
reports, or statements, including financial
statements and other financial data, if
prepared or presented by any of the
following:
(a) One (1) or more Directors, officers or
employees of the Corporation, or of a
business organization under joint control or
common control, whom the Director or officer
reasonably believes to be reliable and
competent in the matters presented.
(b) Legal counsel, public accountants,
engineers or other persons as to matters the
Director or officer reasonably believes are
within the persons? professional or expert
competence.
(c) A committee of the Board of which the
Director is not a member if the Director
reasonably believes the committee merits
confidence.
A Director is not entitled to rely on the
information set forth in this section if the
Director has knowledge concerning the matter
in question that makes reliance otherwise
permitted by this provision unwarranted.
Section 2.15 Certain Transactions. A
transaction in which a Director is
determined to have an interest shall not,
because of the interest, be enjoined, set
aside, or give rise to an award of damages
or other sanctions, in a proceeding by a
Shareholder or by or in the right of the
Corporation, if the person interested in the
transaction establishes any of the
following:
(a) The transaction was fair to the
Corporation at the time entered into.
(b) The material facts of the transaction
and the Director?s or officer?s interest
were disclosed or known to the Board, a
committee of the Board, or the independent
Director or Directors, and the Board
committee, or the independent Director or
Directors authorized, approved, or ratified
the transaction.
(c) The material facts of the transaction
and the Director?s or officer?s interest
were disclosed or known to the Shareholders
entitled to vote and they authorized,
approved or ratified the transaction.
For purposes of (b) above, a transaction is
authorized, approved, or ratified if it
received the affirmative vote of the
majority of the Directors on the Board or
the committee who had no interest in the
transaction, though less than a quorum, or
all independent Directors who had no
interest in the transaction. The presence
of, or a vote cast by, a Director with an
interest in the transaction does not affect
the validity of the action taken under (b)
above. For purposes of (c) above, a
transaction is authorized, approved, or
ratified if it received the majority of
votes cast by the holders of shares of
voting stock who did not have an interest in
the transaction. A majority of the shares of
voting stock held by Shareholders who did
not have an interest in the transaction
constitutes a quorum for the purpose of
taking action under (c) above.
ARTICLE III - OFFICERS
Section 3.01 Officers of the Corporation.
The officers of the Corporation shall
consist of a President, Secretary,
Treasurer, and, if desired, a Chairman of
the Board, one (1) or more Vice Presidents
and such other officers as may be determined
by the Board, who shall be elected or
appointed by the Board. Two (2) or more
offices may be held by the same person but
an officer shall not execute, acknowledge or
verify an instrument in more than one
capacity if the instrument is required by
law or the Articles or Bylaws to be
executed, acknowledged or verified by two
(2) or more officers. An officer elected or
appointed as herein provided shall hold
office for the term for which he or she is
elected or appointed and until his or her
successor is elected or appointed and
qualified, or until his or her resignation
or removal. An officer, as between such
officer and other officers and the
Corporation, has such authority and shall
perform such duties in the management of the
Corporation as may be provided in the
Bylaws, or as may be determined by
resolution of the Board not inconsistent
with the Bylaws.
Section 3.02 Election. The Board shall elect
the officers of the Corporation at any
annual, regular or special meeting. The
salaries of all officers of the Corporation
may be fixed by the Board.
Section 3.03 Removal or Resignation of
Officers. An officer elected or appointed by
the Board may be removed by the Board with
cause by an affirmative vote of a majority
of the Board. The removal of an officer
shall be without prejudice to his contract
rights, if any. The election or appointment
of an officer does not of itself create
contract rights. An officer may resign by
written notice to the Corporation. The
resignation is effective upon its receipt by
the Corporation or at a subsequent time
specified in the notice of resignation.
Section 3.04 Duties of the Chairman of the
Board. The Chairman of the Board, if there
be such an officer, shall preside at all
Shareholders? meetings and all meetings of
the Board, if present, and shall have such
other duties as are assigned by the Board
and shall be the Chief Executive Officer of
the Corporation.
Section 3.05 Duties of the President. The
President shall have direct charge of the
business of the Corporation, subject to the
general control of the Board.
Section 3.06 Duties of the Vice President.
In the event of the absence or disability of
the President, the Vice President, or, in
case there shall be more than one Vice
President, the Vice President designated by
the Board, shall perform all the duties of
the President, and when so acting, shall
have all the powers of, and be subject to
all the restrictions upon, the President.
Section 3.07 Duties of the Secretary. The
Secretary shall, if present, act as
Secretary of, and keep the minutes of, all
the proceedings of the meetings of the
Shareholders and of the Board and of any
committee of the Board in one (1) or more
books to be kept for that purpose; shall
perform other duties as shall be assigned by
the President or the Board; and, in general,
shall perform all duties incident to the
office of Secretary.
Section 3.08 Duties of the Treasurer. The
Treasurer shall keep or cause to be kept
full and accurate records of all receipts
and disbursements in the books of the
Corporation and shall have the care and
custody of all funds and securities of the
Corporation. The Treasurer shall disburse
the funds of the Corporation as may be
ordered by the Board, shall render to the
President and Directors, whenever they
request it, an account of all transactions
as Treasurer and shall perform other duties
as may be assigned by the President or the
Board; and, in general, shall perform all
duties incident to the office of Treasurer.
Section 3.09 Employee Bonds. The Board may
require the Treasurer, the Assistant
Treasurers and any other officers, agents or
employees of the Corporation to give bond
for the faithful discharge of their duties,
in such sum and of such character as the
Board may from time to time prescribe.
Section 3.10 Discharge of Duties; Reliance
on Reports. An officer shall discharge the
duties as an officer, and shall be entitled
to rely on reports, etc., in the same manner
as specified for a Director in Section 2.14.
Section 3.11 Interested Transactions.
Section 2.15 regarding certain transactions
shall apply to officers in the same manner
as specified for a Director.
ARTICLE IV - EXECUTION OF INSTRUMENTS,
DEPOSITS, VOTING OF SECURITIES
Section 4.01 General. Subject to the
provisions of Delaware General Corporation
Law, all deeds, documents, transfers,
contracts, agreements and other instruments
requiring execution by the Corporation shall
be signed by the President and by the
Treasurer, or Secretary or as the Board may
otherwise from time to time authorize.
Section 4.02 Corporate Indebtedness. No loan
shall be contracted on behalf of the
Corporation, and no evidence of indebtedness
shall be issued in its name, unless
authorized by the Board. Authorization may
be general or confined to specific
instances. All bonds, debentures, notes and
other obligations or evidences of
indebtedness of the Corporation issued for
loans shall be made, executed and delivered
as the Board shall authorize. When
authorized by the Board, any part or all of
the properties, including contract rights,
assets, business or goodwill of the
Corporation, or inventories, whether then
owned or thereafter acquired, may be
mortgaged, pledged, hypothecated or conveyed
or assigned in trust as security for the
payment of such bonds, debentures, notes and
other obligations or evidences of
indebtedness of the Corporation, and of the
interest thereon, by instruments executed
and delivered in the name of the
Corporation.
Section 4.03 Checks or Drafts. All checks,
drafts, bills of exchange or other orders
for the payment of money issued in the name
of the Corporation shall be signed only by
such person or persons and in such manner as
may from time to time be designated by the
Board, and unless
so designated, no person shall have any
power or authority thereby to bind the
Corporation or to pledge its credit or to
render it liable.
Section 4.04 Deposits. All funds of the
Corporation not otherwise employed shall be
deposited from time to time to the credit of
the Corporation in such banks, trust
companies or other financial institutions as
the Board may select. For the purpose of
deposit and for the purpose of collection
for the account of the Corporation, checks,
drafts and other orders for the payments of
money which are payable to the order of the
Corporation shall be endorsed, assigned and
delivered by such person or persons and in
such manner as may from time to time be
designated by the Board.
Section 4.05 Appointment of Agents to Vote
Securities and Other Corporations. Unless
otherwise provided by resolution adopted by
the Board, the President may from time to
time appoint one (1) or more attorney or
agent, to exercise in the name and on behalf
of the Corporation the powers and rights
which the Corporation may have as the holder
of stock or other securities in any other
corporation to vote or to consent in respect
of such stock or other securities; and the
President may instruct the person or persons
so appointed as to the manner of exercising
such powers and rights. The President may
execute or cause to be executed in the name
and on behalf of the Corporation all such
written proxies, powers of attorney or other
written instruments as the President may
deem necessary in order that the Corporation
may exercise such powers and rights.
ARTICLE V - CAPITAL STOCK
Section 5.01 Stock Certificates. The shares
of the Corporation shall be represented by
certificates which shall be signed by the
Chairman of the Board, President or a Vice
President and which also may be signed by
another officer of the Corporation. The
certificate may be sealed with the seal of
the Corporation or a facsimile of the seal.
The signatures of the officers may be
facsimiles if the certificate is
countersigned by a transfer agent or
registered by a registrar other than the
Corporation itself or its employee. If an
officer who has signed or whose facsimile
signature has been placed upon a certificate
ceases to be an officer before the
certificate is issued, it may be issued by
the Corporation with the same effect as if
he or she were the officer at the date of
issue.
Section 5.02 Uncertificated Stock.
Notwithstanding the foregoing, the Board may
authorize the issuance of some or all of the
shares of any or all of its classes or
series without certificates. The
authorization does not affect shares already
represented by certificates until they are
surrendered to the Corporation. Within a
reasonable time after the issuance or
transfer of shares without certificates, the
Corporation shall send the Shareholder a
written statement of the information
required on certificates as required by
Delaware General Corporation Law.
Section 5.03 Transfer of Stock. Upon
surrender to the Corporation or the transfer
agent of the Corporation of a certificate
for shares duly endorsed or accompanied by
proper evidence of succession, assignment or
authority to transfer, it shall be the duty
of the Corporation to issue a new
certificate to the person entitled thereto,
cancel the old certificate and record the
transaction upon its books.
Section 5.04 Record Date.
(a) For the purpose of determining
Shareholders entitled to notice at a meeting
of Shareholders or an adjournment of a
meeting, the Board may fix a record date,
which shall not precede the date on which
the resolution fixing the record date is
adopted by the Board. The date shall not be
more than sixty (60) days nor less than ten
(10) days before the date of the meeting. If
a record date is not fixed, the record date
for determination of Shareholders entitled
to notice of or to vote at a meeting of
Shareholders shall be the close of business
on the day next preceding the day on which
notice is given, or if no notice is given,
the day next preceding the day on which the
meeting is held. When a determination of
Shareholders of record entitled to notice of
or to vote at a meeting of Shareholders has
been made as provided in this section, the
determination applies to any adjournment of
the meeting, unless the Board fixes a new
record date under this section for the
adjourned meeting.
(b) For the purpose of determining
Shareholders entitled to express consent to
or dissent from a proposal without a
meeting, the Board may fix a record date,
which shall not precede the date on which
the resolution fixing the record date is
adopted by the Board and shall not be more
than ten (10) days after the Board
resolution. If a record date is not fixed
and prior action by the Board is required
with respect to the corporate action to be
taken without a meeting, the record date
shall be the close of business on the day on
which the resolution of the Board is
adopted. If a record date is not fixed and
prior action by the Board is not required,
the record date shall be the first date on
which a signed written consent is delivered
to the Corporation as provided Delaware
General Corporation Law.
(c) For the purpose of determining
Shareholders entitled to receive payment of
a share dividend or distribution, or
allotment of a right, or for the purpose of
any other action, the Board may fix a record
date, which shall not precede the date on
which the resolution fixing the record date
is adopted by the Board. The date shall not
be more than sixty (60) days before the
payment of the share dividend or
distribution or allotment of a right or
other action. If a record date is not fixed,
the record date shall be the close of
business on the day on which the resolution
of the Board relating to the corporate
action is adopted.
Section 5.05 Registered Shareholders. Prior
to due presentment for registration of
transfer of a security in registered form,
the Corporation may treat the registered
owner as the person exclusively entitled to
vote, to receive notifications and otherwise
to exercise all rights and powers of an
owner.
Section 5.06 Lost Certificates. The Board
may direct that a new certificate be issued
in place of any certificate issued by the
Corporation alleged to have been lost or
destroyed, upon the making of an affidavit
of the fact by the person claiming the
certificate of stock to be lost or
destroyed. When authorizing such issues of a
new certificate, the Board may, in its
discretion and as a condition precedent to
the issuance thereof, require the owner of
such lost or destroyed certificate, or their
legal representative, to give the
Corporation a bond sufficient to indemnify
the Corporation against any claim that may
be made against the Corporation with respect
to the certificate alleged to have been lost
or destroyed or the issuance of a new
certificate.
ARTICLE VI - INDEMNIFICATION OF OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS
Section 6.01 Indemnification of Directors
and Officers-Claims by Third Parties. The
Corporation shall, to the fullest extent
authorized or permitted by Delaware General
Corporation Law or other applicable law, as
the same presently exists or may hereafter
be amended, indemnify a Director or officer
(the ?Indemnitee?) who was or is a party or
is threatened to be made a party to a
threatened, pending, or completed action,
suit, or proceeding, whether civil,
criminal, administrative, or investigative
and whether formal or informal, other than
an action by or in the right of the
Corporation, by reason of the fact that he
or she is or was a Director, officer,
employee or agent of the Corporation, or is
or was serving at the request of the
Corporation as a Director, officer, partner,
trustee, employee, or agent of another
foreign or domestic corporation,
partnership, joint venture, trust, or other
enterprise, whether for profit or not,
against expenses, including attorneys? fees,
judgments, penalties, fines, and amounts
paid in settlement actually and reasonably
incurred by him or her in connection with
the action, suit, or proceeding, if the
Indemnitee acted in good faith and in a
manner he or she reasonably believed to be
in or not opposed to the best interests of
the Corporation or its Shareholders, and
with respect to a criminal action or
proceeding, if the Indemnitee had no
reasonable cause to believe his or her
conduct was unlawful. The termination of an
action, suit or proceeding by judgment,
order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent,
does not, of itself, create a presumption
that the Indemnitee did not act in good
faith and in a manner which he or she
reasonably believed to be in or not opposed
to the best interests of the corporation or
its Shareholders, and, with respect to a
criminal action or proceeding, had
reasonable cause to believe that his or her
conduct was unlawful.
Section 6.02 Indemnification of Directors
and Officers-Claims Brought By or In the
Right of the Corporation. The Corporation
shall, to the fullest extent authorized or
permitted by the Delaware General
Corporation Law or other applicable law, as
the same presently exists or may hereafter
be amended, indemnify a Director or officer
(the ?Indemnitee?) who was or is a party to
or is threatened to be made a party to a
threatened, pending, or completed action or
suit by or in the right of the Corporation
to procure a judgment in its favor by reason
of the fact that he or she is or was a
Director, officer, employee or agent of the
Corporation, or is or was serving at the
request of the Corporation as a Director,
officer, partner, trustee, employee, or
agent of another foreign or domestic
corporation, partnership, joint venture,
trust, or other enterprise, whether for
profit or not, against expenses, including
attorneys? fees, and amounts paid in
settlement actually and reasonably incurred
by the person in connection with the action
or suit, if the Indemnitee acted in good
faith and in a manner the person reasonably
believed to be in or not opposed to the best
interests of the Corporation or its
Shareholders. However, indemnification under
this Section shall not be made for a claim,
issue or matter in which the Indemnitee has
been found liable to the Corporation except
to the extent authorized in Section 6.05
below.
Section 6.03 Approval of Indemnification.
An indemnification under Sections 6.01 or
6.2 hereof, unless ordered by a court,
shall be made by the Corporation only as
authorized in the specific case upon a
determination that indemnification of the
Indemnitee is proper in the circumstances
because such Indemnitee has met the
applicable standard of conduct set forth in
Sections 6.01 and 6.02 and upon an
evaluation of the reasonableness of expenses
and amounts paid in settlement. This
determination shall be made in any of the
following ways:
(a) By a majority vote of a quorum of the
Board consisting of Directors who were not
parties or threatened to be made parties to
the action, suit or proceeding.
(b) If the quorum cannot be obtained under
subdivision (a), by majority vote of a
committee duly designated by the Board of
Directors and consisting solely of two (2)
or more Directors not at the time parties or
threatened to be made parties to the action,
suit, or proceeding.
(c) By independent legal counsel in a
written opinion, which counsel shall be
selected in one of the following ways:
(i) By the Board or its committee in a
manner prescribed in subdivision
(a) or (b).
(ii) If a quorum of the Board cannot be
obtained under subdivision (a) and a
committee cannot be designated under
subdivision (b), by the Board.
(d) By all independent Directors who are
not parties or threatened to be made parties
to the action, suit or proceeding.
(e) By the Shareholders, but shares held by
Directors, officers, employees or agents who
are parties or threatened to be made parties
to the action, suit, or proceeding may not
be voted.
In the designation of a committee under
subsection (b) or in the selection of
independent legal counsel under subsection
(c)(ii), all Directors may participate.
Section 6.04 Advancement of Expenses. The
Corporation shall pay or reimburse the
reasonable expenses incurred by an
Indemnitee who is a party or threatened to
be made a party to an action, suit, or
proceeding in advance of final disposition
of the proceeding if all of the following
apply:
(a) The Indemnitee furnishes the
Corporation a written affirmation of his or
her good faith belief that he or she has met
the applicable standard of conduct set forth
in Delaware General Corporation Law.
(b) The Indemnitee furnishes the
Corporation a written undertaking, executed
personally or on his or her behalf, to repay
the advance if it is ultimately determined
that he or she did not meet the standard of
conduct.
(c) A determination is made that the facts
then known to those making the determination
would not preclude indemnification under
this Act.
The undertaking required by subsection (b)
must be an unlimited general obligation of
the person but need not be secured.
Determinations of payments under this
Section shall be made in the manner
specified in Section 6.03.
Section 6.05 Court Approval. An Indemnitee
who is a party or threatened to be made a
party to an action, suit or proceeding may
apply for indemnification to the court
conducting the proceeding or to another
court of competent jurisdiction. On receipt
of an application, the court after giving
any notice it considers necessary may order
indemnification if it determines that the
person is fairly and reasonably entitled to
indemnification in view of all the relevant
circumstances, whether or not he or she has
met the applicable standard of conduct set
forth in Sections 6.01 and
6.2 or was adjudged liable as described in
Section 6.02, but if he or she was adjudged
liable, his or her indemnification is
limited to reasonable expenses incurred.
Section 6.06 Partial Indemnification. If an
Indemnitee is entitled to indemnification
under Section 6.01 or 6.02 for a portion of
expenses including attorneys? fees,
judgments, penalties, fines, and amounts
paid in settlement, but not for the total
amount, the Corporation shall indemnify the
Indemnitee for the portion of the expenses,
judgments, penalties, fines, or amounts paid
in settlement for which the Indemnitee is
entitled to be indemnified.
Section 6.07 Indemnification of Employees
and Agents. Any person who is not covered by
the foregoing provisions of this Article and
who is or was an employee or agent of the
Corporation, or is or was serving at the
request of the Corporation as a Director,
officer, employee or agent of another
corporation, partnership, joint venture,
trust, employee benefit plan or other
enterprise, may be indemnified to the
fullest extent authorized or permitted by
the Delaware General Corporation Law or
other applicable law, as the same exist or
may hereafter be amended, but in the case of
any such amendment, only to the extent such
amendment permits the Corporation to provide
broader indemnification rights than before
such amendment, but in any event only to the
extent authorized at any time or from time-
to-time by the Board of Directors.
Section 6.08 Other Rights of
Indemnification. The indemnification or
advancement of expenses provided under
Sections 6.01 to 6.07 is not exclusive of
other rights to which a person seeking
indemnification or advancement of expenses
may be entitled under the Articles, the
Bylaws or a contractual agreement. However,
the total amount of expenses advanced or
indemnified from all sources combined shall
not exceed the amount of actual expenses
incurred by the person seeking
indemnification or advancement of expenses.
The indemnification provided for in Sections
6.01 to 6.08 continues as to a person who
ceases to be a Director, officer, employee
or agent and shall inure to the benefit of
the heirs, executors and administrators of
the person.
Section 6.09 Contract With the Corporation.
The right to indemnification conferred in
this Article VI shall be deemed to be a
contract between the Corporation and each
Director or officer who serves in any such
capacity at any time while this Article VI
is in effect, and any repeal or modification
of any such law or of this Article VI shall
not affect any rights or obligations then
existing with respect to any state of facts
then or theretofore existing or any action,
suit or proceeding theretofore or thereafter
brought or threatened based in whole or in
part upon any such state of facts. In the
event this Article is repealed or modified,
the Corporation shall give written notice
thereof to the Directors and officers and
any such repeal or modification shall not be
effective for a period of sixty (60) days
after such notice is delivered.
Section 6.10 Definitions. For the
purposes of Sections 6.01 to 6.09:
(a) ?Fines? shall include any excise taxes
assessed on a person with respect to an
employee benefit plan.
(b) ?Other enterprises? shall include
employee benefit plans.
(c) ?Servicing at the request of the
Corporation? shall include any service as a
Director, officer, employee or agent of the
Corporation which imposes duties on, or
involves services by, the Director, officer,
employee or agent with respect to an
employee benefit plan, its participants or
its beneficiaries.
(d) A person who acted in good faith and in
a manner he or she reasonably believed to be
in the interest of the participants and
beneficiaries of an employee benefit plan
shall be considered to have acted in a
manner ?not opposed to the best interests of
the Corporation or its Shareholders? as
referred to in Sections 6.01 and 6.02.
Section 6.11 Application to a Resulting or
Surviving Corporation or Constituent
Corporation. The definition for
?corporation? found in Delaware General
Corporation Law, as the same exists or may
hereafter be amended, is and shall be,
specifically excluded from application to
this Article. The indemnification and other
obligations of the Corporation set forth in
this Article shall be binding upon any
resulting or surviving corporation after any
merger or consolidation of the Corporation.
Notwithstanding anything to the contrary
contained herein or in Delaware General
Corporation Law, no person shall be entitled
to the indemnification and other rights set
forth in this Article for acting as a
Director or officer of another corporation
prior to such other corporation entering
into a merger or consolidation with the
Corporation.
Section 6.12 Enforcement. If a claim under
this Article is not paid in full by the
Corporation within thirty (30) days after a
written claim has been received by the
Corporation, the claimant may at any time
thereafter bring suit against the
Corporation to recover the unpaid amount of
the claim, and, if successful in whole or in
part, the claimant shall be entitled to be
paid also the expense of prosecuting such
claim. It shall be a defense to any such
action (other than an action brought to
enforce a claim for expenses incurred in
defending any proceeding in advance of its
final disposition where the required
undertaking, if any is required, has been
tendered to the Corporation) that the
claimant has not met the standards of
conduct which make it permissible under
Delaware General Corporation Law for the
Corporation to indemnify the claimant for
the amount claimed, but the burden of
proving such defense shall be on the
Corporation. Neither the failure of the
Corporation (including its Board of
Directors, a committee thereof, independent
legal counsel, or its Shareholders) to have
made a determination prior to the
commencement of such action that
indemnification of the claimant is proper in
the circumstances because such claimant has
met the applicable standard of conduct set
forth in the Delaware General Corporation
Law nor an actual determination by the
Corporation (including its Board of
Directors, a committee thereof, independent
legal counsel or its Shareholders) that the
claimant has not met applicable standard of
conduct, shall be a defense to the action or
create a presumption that the claimant has
not met the applicable standard of conduct.
Section 6.13 Severability. Each and every
paragraph, sentence, term and provision of
this Article VI shall be considered
severable in that, in the event a court
finds any paragraph, sentence, term or
provision to be invalid or unenforceable,
the validity and enforceability, operation,
or effect of the remaining paragraphs,
sentences, terms, or provisions shall not be
affected, and this Article VI shall be
construed in all respects as if the invalid
or unenforceable matter had been omitted.
Section 6.14 Liability Insurance. The
Corporation shall have the power to purchase
and maintain insurance on behalf of any
person who is or was a Director, officer,
employee, or agent of the Corporation, or is
or was serving at the request of the
Corporation as a Director, officer, partner,
trustee, employee, or agent of another
corporation, partnership, joint venture,
trust, or other enterprise against any
liability asserted against him or her and
incurred by him or her in any such capacity
or arising out of his or her status as such,
whether or not the Corporation would have
the power to indemnify him or her against
such liability under the provisions of this
Article or the MBCA.
ARTICLE VII - GENERAL PROVISIONS
Section 7.01 Dividends. Dividends
upon the stock of the Corporation, subject
to the provisions of the Articles, if any,
may be declared by the Board at any regular
or special meeting, pursuant to the
restrictions of Delaware General Corporation
Law. Dividends may be paid in cash, in
property, or in shares of stock, subject to
the provisions of the Articles and the
applicable statute.
Section 7.02 Reserves. Before payment of any
dividend, there may be set aside out of any
funds of the Corporation available for
dividend such sum or sums as the Directors
from time to time, in their absolute
discretion think proper as a reserve or
reserves to meet contingencies, or for
equalizing dividends, or for repairing or
maintaining any property of the Corporation,
or for such other purpose as the Directors
shall deem conducive to the interest of the
Corporation, and the Directors may modify or
abolish any such reserve.
Section 7.03 Fiscal Year. The fiscal year of
the Corporation, if other than the calendar
year, shall be fixed by resolution of the
Board.
Section 7.04 Offices. The registered office
of the Corporation shall be as designated in
the Articles or at such other place or
places in or outside the State of New Jersey
as the Board may from time to time
determine.
Section 7.05 Books and Records. The
Corporation shall keep books and records of
account and minutes of the proceedings of
its Shareholders, Board and executive
committee, if any, which may be kept inside
or outside the state of New Jersey. The
Corporation shall keep at its registered
office, or at the office of its transfer
agent in or outside the State of New Jersey,
records containing the names and addresses
of all Shareholders, the number, class and
series of shares held by each, and the dates
when they respectively became holders of
record. Any of the books, records or minutes
may be in written form or in any other form
capable of being converted into written form
within a reasonable time. The Corporation
shall convert into written form without
charge any record not in written form,
unless otherwise requested by a person
entitled to inspect the record.
Section 7.06 Amendments. The Shareholders or
the Board may amend or repeal the Bylaws or
adopt new Bylaws unless the Articles or
Bylaws provide that the power to adopt new
Bylaws is reserved exclusively to the
Shareholders or any particular Bylaw shall
not be altered or repealed by the Board.
Such action may be taken by written consent
or at a meeting of Shareholders or the
Board; provided that if notice of any such
meeting is required by these Bylaws, the
notice of the meeting shall contain notice
of the proposed amendment, repeal or new
Bylaws. Any bylaw hereafter made by the
Shareholders shall not be altered or
repealed by the Board.
Amendment of the Bylaws by the Board shall
be by not less than a majority of the
members of the Board then in office.
ARTICLE VIII - INTERPRETATION
Section 8.01 Conflict With Statute. In the
event any Article or section of these Bylaws
shall conflict with the Delaware General
Corporation Law, Delaware General
Corporation Law shall rule.
Section 8.02 Headings. The Article and
paragraph headings included in these Bylaws
have been used solely for convenience and
shall in no event act as or be used in
conjunction with the interpretation of these
Bylaws.
I certify that the foregoing Bylaws were
adopted by the Corporation on the 15th day
of August, 2016
Recoverable Signature
X Kim Lavine
Kim Lavine Secretary
Signed by: accounts.google.com
EX1A-3 HLDRS RTS
4
spt-shareholdersagrmt.txt
SPT SHAREHOLDERS AGREEMENT
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT (this
?Agreement?) is made as of March 14, 2016 by
and among, the Shareholders identified (or
here after identified) on Schedule 1 hereto
(each a ?Shareholder? and collectively the
?Shareholders?), and SENSORY PERFORMANCE
TECHNOLOGY, INC, a Delaware corporation (the
?Corporation?).
BACKGROUND
The Shareholders each currently own the
number of shares of preferred and common
stock in the Corporation shown in the
following table on Schedule I attached
hereto collectively, and together with any
shares of capital stock in the Corporation
hereafter owned by any of the Shareholders
(the ?Stock?).
The Shareholders and the Corporation wish to
promote their mutual interests by imposing
certain restrictions upon the transfer of
the Stock, and providing for the sale and
purchase of the Stock under certain
circumstances, and agreeing upon how the
Stock should be voted.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the
foregoing and the terms and conditions set
forth herein, the parties hereto agree as
follows:
1. RESTRICTION ON TRANSFER. Except as
otherwise specifically set forth in this
Agreement, no Shareholders shall transfer
any shares of Stock or any interest therein
in any manner, voluntarily or involuntarily,
including, without limitation, by sale,
gift, pledge, grant of an option to
purchase, encumbrance, bequest, descent,
devise, operation of law (including
attachment, execution, legal process, or
bankruptcy or insolvency proceedings) or any
other disposition, and no such attempted
transfer shall be treated as effective for
any purpose. After the date of this
Agreement, the Corporation shall not allow
any person or entity to become a registered
holder of any shares of the Stock unless (a)
such shares were acquired by such person or
entity in accordance with this Agreement,
and (b) such person or entity agrees in
writing to be bound by this Agreement.
2. VOLUNTARY DISPOSITION. In the event a
Shareholder (the ?Transferor Shareholder?)
wishes voluntarily to sell, make a gift of,
pledge, grant an option to purchase,
encumber, transfer or dispose of any
interest in all or any part of the Stock
owned by the Transferor Shareholder (the
?Voluntarily Offered Stock?) in any manner,
the Transferor Shareholder shall give the
Corporation and the other Shareholders (the
?Remaining Shareholders?) written notice of
such intention to dispose of the Voluntarily
Offered Stock, the terms of such disposition
(including price and terms of payment), the
name of the proposed transferee, and an
offer to sell all of the Voluntarily Offered
Stock to the Corporation and the Remaining
Shareholders in accordance with the
following:
(a) For a period of thirty (30) days after
receipt of such written notice, the
Corporation shall have the option to
purchase all or part of the Voluntarily
Offered Stock from
the Transferor Shareholder by giving written
notice to the Transferor Shareholder of the
exercise thereof. The decision of the
Corporation to exercise such option shall be
made by its CEO/President, Ben White,
exclusive of any director who is also the
Transferor Shareholder.
(b) In the event the Corporation does not
exercise its option to buy all of the
Voluntarily Offered Stock within such thirty
(30) day period, the Remaining Shareholders
shall have an option to purchase all or part
of the Voluntarily Offered Stock or any
remaining portion thereof, for an additional
period of thirty (30) days upon the same
terms and conditions as the Corporation, by
giving written notice to the Transferor
Shareholder of the exercise thereof. In the
event two or more Shareholders wish to
purchase the Voluntarily Offered Stock, each
such Shareholder shall be entitled to
purchase a portion of the shares of the
Voluntarily Offered Stock in the same
proportion as the number of shares of Stock
then owned by such Shareholder bears to the
total number of shares of Stock then owned
by all such Shareholders electing to
purchase such shares of the Voluntarily
Offered Stock.
(c) The purchase price and payment terms
for the Voluntarily Offered Stock shall be
as follows: (i) if the proposed transfer is
a bona fide sale, the price and terms shall
be the same as those agreed upon by the
Transferor Shareholder and the proposed
transferee; or
(ii) if the proposed transfer is by any
means other than a bona fide sale, the price
and terms shall be as set forth in Sections
5 and 6 hereof, respectively.
(d) The option of the Corporation and/or
the Remaining Shareholders to purchase the
Voluntarily Offered Stock shall be
conditioned upon the purchase of all the
shares of the Voluntarily Offered Stock. In
the event the Corporation and/or the
Remaining Shareholders shall have failed to
exercise the option to purchase or shall
have exercised their option to purchase less
than all of the Voluntarily Offered Stock,
the Transferor Shareholder shall be free
for a period of thirty (30) days thereafter
to transfer all of the Voluntarily Offered
Stock in accordance with the terms and to
the transferee set forth in the Transferor
Shareholder?s written notice of intended
disposition; provided, however, the intended
transferee shall agree in writing to be
subject to such terms, conditions and
restrictions, if any, which the Corporation
and the Remaining Shareholders shall
require.
3. INVOLUNTARY TRANSFER OF STOCK. In the
event of an involuntary transfer of any
shares of the Stock of a Shareholder by
operation of law or otherwise, including,
without limitation, transfer by virtue of
bankruptcy proceedings, divorce, insolvency
or creditor?s proceedings or arrangements of
any kind, execution or attachment, the
person or entity to whom or which such
shares of the Stock have been involuntarily
transferred (the ?Involuntary Transferee?)
shall be deemed to offer to sell such shares
of the Stock (the ?Involuntarily Offered
Stock?), at the price and upon the terms set
forth in Sections 6 and 7 hereof,
respectively, to the Corporation and the
Remaining Shareholders in accordance with
the following:
(a) For a period of thirty (30) days after
receipt of written notice of such
involuntary transfer, the Corporation shall
have the option to purchase all or part of
the Involuntarily Offered Stock from the
Involuntary Transferee by giving written
notice to the Involuntary Transferee of the
exercise thereof. The decision of the
Corporation to exercise its option shall be
made by its CEO/President Ben White,
exclusive of any director who is also the
Involuntary Transferee or the Shareholder
who?s Stock was transferred to the
Involuntary Transferee.
(b) In the event the Corporation does not
exercise its option to buy all of the
Involuntarily Offered Stock within such
thirty (30) day period, the Corporation
shall give written notice of the option to
all Remaining Shareholders, and the
Remaining Shareholders shall have an option
to purchase all or part of the Involuntarily
Offered Stock or any remaining portion
thereof, for an additional period of thirty
(30) days upon the same terms and conditions
as the Corporation, by giving written notice
to the Involuntary Transferee and the
Corporation of the exercise thereof. In the
event two or more Shareholders wish to
purchase the Involuntarily Offered Stock,
each such Shareholder shall be entitled to
purchase a portion of the shares of the
Involuntarily Offered Stock in the same
proportion as the number of shares of the
Stock then owned by such Shareholder bears
to the total number of shares of Stock then
owned by all such Shareholders electing to
purchase such shares of the Involuntarily
Offered Stock.
(c) The Corporation and/or the Remaining
Shareholders may purchase less than all of
the Involuntarily Offered Stock. In the
event that the Corporation and/or the
Remaining Shareholders shall have failed to
exercise the option to purchase or shall
have exercised their option to purchase less
than all of the Involuntarily Offered Stock,
the involuntary transfer shall be permitted
as to that portion of the Involuntarily
Offered Stock for which such option is not
exercised; provided, however, the
Involuntary Transferee shall agree in
writing to be subject to such terms,
conditions and restrictions, if any, which
the Corporation and the Remaining
Shareholders shall require.
4. DEATH OR DISABILITY OF A SHAREHOLDER.
Upon the death or disability of any
Shareholder (or the grantor of any trust
created for estate planning purposes holding
shares of the Stock), the Corporation shall
purchase, and said Shareholder or the
guardian, legal representative or heirs of
said Shareholder or the trustee, as the case
may be, shall sell, all of said
Shareholder?s shares of Stock. For purposes
hereof, ?disability? shall be defined as a
state of mental or physical illness of
such a degree that Shareholder, if employed
by the Corporation, is unable to render
services to the Corporation in the usual
course of business with reasonable
accommodation for a period of six (6)
months. The purchase shall be at the price
and upon the terms set forth in Sections 6
and 7 below.
(a) The determination of whether a
Shareholder is disabled shall initially be
made by a physician selected by the
Shareholder or his/her guardian, and the
Shareholder shall be obligated to pay for
the services of this physician. A written
copy of the physician?s decision shall be
sent to the Corporation. Within thirty (30)
days after receiving this notice, the
Corporation may dispute the determination
that the Shareholder is disabled by sending
a written notice to the Shareholder seeking
to be declared disabled stating that the
Corporation disputes the decision regarding
the Shareholder?s disability. Following the
giving of the Corporation?s notice, the
Shareholder shall be examined by a physician
selected by the CEO/President Ben White, and
the decision of this physician shall be
decisive. The date on which the Shareholder
is determined to be disabled shall be the
date on which the initial physician sends a
copy of his/her determination to the
Corporation; however, if the Corporation
challenges this determination then the date
for determination of disability shall be the
date on which the physician selected by the
CEO/President Ben White renders his/her
decision on whether the Shareholder is
disabled. To the extent not paid by
insurance, the Corporation shall pay for the
services of the physician selected by the
CEO/President Ben White and any related fees
and expenses, including for hospitalization,
tests and medical procedures.
(b) The Corporation, as applicant,
beneficiary and owner, may purchase and
maintain insurance on the lives of any
Shareholder in an amount to be determined by
its CEO/President, Ben White. Upon the death
of any Shareholder hereunder upon whose life
the Corporation owns insurance, the
Corporation shall promptly purchase said
Shareholder?s shares of Stock at the price
and terms set forth in Sections 6 and 7
below. The Purchase Price of the Stock under
this Section shall be computed without
including proceeds of life insurance on the
life of a Shareholder payable to the
Corporation.
5. TERMINATION OF EMPLOYMENT OF
SHAREHOLDER. In the event a Shareholder is
employed by the Corporation now or in the
future and such Shareholder?s employment by
the Corporation is terminated, the
Corporation shall purchase, and the
Shareholder shall sell, all shares of the
Stock owned by the Shareholder, by giving
written notice of such exercise within sixty
(60) days of the date such Shareholder?s
employment is terminated. The purchase by
the Corporation shall be at the price and
upon the terms set forth in Sections 6 and 7
below.
6. PURCHASE PRICE.
(a) The per share purchase price for any
Stock purchased pursuant to Section 2
(except for any Stock Purchased pursuant to
Section 2(c)(i)), Section 3, Section 4 or
Section 5 hereof shall be equal to the Fair
Market Value thereof. For purposes of this
Agreement, ?Fair Market Value? means (a) the
closing sale price for a share of the
Corporation?s common stock
(i) on any national exchange on which the
Corporation is listed, or (ii) the National
Association of Securities Dealers, Inc.
Automated Quotation System (?NASDAQ?),
provided such common stock is authorized for
quotation as a NASDAQ National Market System
Security for such date (or, if no sale is so
reported for such date, for the latest
preceding date on which such a sale was so
reported), or (b) if such common stock is
not so listed or authorized for quotation,
the price of such common stock determined by
the CEO/President of the Corporation Ben
White, in good faith, from time to time, in
connection with either the grant of an
incentive stock option qualified under
Section 422 of the Internal Revenue Code of
1986 (the ?Code?), as amended, or the sale
of common stock in a private sale to a third
party in an ?arms-length? transaction (the
?Determined Value?).
(b) Notwithstanding the foregoing
subsection, in the event that the selling
Shareholder (or a Shareholder?s guardian,
legal representative or heir, as applicable)
(the ?Seller?) shall give the Corporation
written notice within fifteen (15) days
(forty-five (45) days in the case of the
death of a Shareholder) of the event
triggering such sale that the Determined
Value then in effect is not acceptable, or
if the Determined Value was determined more
than eighteen (18) months prior to the event
triggering the sale, the Corporation and
such Seller shall select a mutually
acceptable appraiser to determine the then
fair market per share value of the Stock. If
the Seller and the Corporation shall be
unable to agree upon an appraiser, each
shall select an appraiser and the two
appraisers so selected shall select a third
appraiser. Such third appraiser shall then
determine the per share fair market value of
the Stock. In either case, the Corporation
and the Seller shall equally share the costs
of such appraisal process and the appraised
per share value of the Stock shall dictate
the purchase price for purposes of the sale
and purchase of Stock mandated by Sections
2(c)(ii), 3, 4 and 5 hereof. Both the Seller
and the Corporation shall ensure that the
other receives a complete copy of the
appraisal. Any other Shareholder shall have
the right to inspect any such appraisal at
the offices of the Corporation.
7. TERMS OF SALE. The purchase and sale of
the Stock under Sections 2(c)(ii), 3, 4 or 5
hereof shall be on the following terms:
(a) The closing of the sale and purchase of
the Stock (the ?Closing?) shall take place
as promptly as possible but in no event
later than (i) ninety (90) days after the
expiration of the Corporation?s option
described in Section 2(a), for purchases
being made pursuant to Section 2; or (ii)
ninety (90) days after the expiration of the
Corporation?s option described in Section
3(a) for purchases being made pursuant to
Section 3; (iii) ninety (90) days following
the death of a Shareholder or the date on
which a Shareholder is determined to be
disabled for purchases made pursuant to
Section 4; or (iv) (iii) ninety (90) days
following the termination of an employee-
Shareholder for purchases made pursuant to
Section 5. Notwithstanding the foregoing, in
the event an appraisal of the per share fair
market value is required pursuant to Section
6(b) hereof, the closing shall occur within
thirty (30) days after receipt of the
appraisal by the Corporation.
(b) At the Closing, the Transferor
Shareholder or the Shareholder, or the
Shareholder?s guardian, heirs or legal
representative, or other person or entity
with power to transfer the Stock, or the
Involuntary Transferee, as the case may be,
shall deliver to each purchaser of the Stock
a stock certificate, properly endorsed for
transfer to the purchaser, evidencing all of
the shares of the Corporation to be
purchased hereunder, which shares shall be
free of all liens, encumbrances, security
interests, restrictions, and other interests
(except any restrictions as set forth in
this Agreement).
8. OBLIGATION TO PURCHASE. If the
Corporation is unable lawfully under
Delaware corporate law to purchase all of
the Stock which it is obligated to purchase,
it shall proceed to purchase those shares
which it is permitted lawfully to purchase,
and its obligation to purchase the remaining
shares shall be suspended until such time as
it is lawfully able to do so. The
Corporation shall be obligated to take, to
the extent deemed reasonable by its
CEO/President, Ben White, such actions
permitted under Section 345 lawfully to
purchase and pay for such shares, including,
without limitation, revaluing its assets or
using alternative accounting practices and
principles. The Shareholders agree to vote
their respective shares as may be
appropriate or necessary to enable the
Corporation lawfully to purchase and pay for
all the shares of Stock to be purchased;
provided, however, the Shareholders shall
not be obligated to personally guaranty such
indebtedness or contribute additional
capital to the Corporation.
9. INSURANCE. The Corporation, as
applicant, beneficiary and owner, may
purchase and maintain life and disability
insurance on any or all of the Shareholders
in an amount to be determined by the
Corporation?s CEO/President, Ben White. Upon
the death or disability of such
Shareholder, the Corporation shall collect
the proceeds of such insurance and use the
same to purchase such Shareholder?s shares
of Stock as provided herein. The Corporation
shall retain any remaining proceeds.
10. LEGEND ON STOCK CERTIFICATE. Upon the
execution of this Agreement, the
Shareholders shall surrender all of their
stock certificates evidencing the Stock to
the Corporation for the endorsement thereon
of the following legend:
THE CAPITAL STOCK REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFERABILITY SET FORTH IN
A SHAREHOLDERS AGREEMENT AMONG THE
CORPORATION AND CERTAIN OF ITS SHAREHOLDERS,
AS AMENDED FROM TIME TO TIME, A COPY OF
WHICH IS ON FILE WITH THE SECRETARY OF THE
CORPORATION.
After endorsement, the certificates shall be
returned to the Shareholders who shall,
subject to the terms of this Agreement, be
entitled to exercise all rights of ownership
of the shares of the Stock. All shares of
the Stock hereinafter issued by the
Corporation shall bear the same legend.
11. TERMINATION. This Agreement shall
terminate upon (a) the effectiveness of a
registration statement filed by the
Corporation under the Securities Act of
1933, as amended, as part of a firmly
underwritten public offering of the capital
stock of the Corporation, (b) the signed
written agreement of the Corporation and the
holders holding ninety percent (90%) of the
issued and outstanding shares of the Stock;
(c) the acquisition by a single Shareholder
of all of the Stock of the Shareholders; (d)
the adjudication of the Corporation as a
bankrupt; (e) the execution by the
Corporation of an assignment for the benefit
of creditors; (f) the appointment of a
receiver for the Corporation; (g) the
voluntary or involuntary dissolution of the
Corporation; or
(h) with respect to any Shareholder, when
such Shareholder ceases to be a registered
holder of shares of the Stock.
11. PERMITTED ESTATE PLANNING TRANSFERS.
Notwithstanding anything in this Agreement
to the contrary, any Shareholder may, at
his/her option, transfer all or any portion
of his/her shares of Stock into one or more
grantor-type trusts (as defined in Section
671 of the Code) created by him/her for
estate planning purposes provided that each
such trust shall provide that during his/her
lifetime, he/she shall be and remain the
sole and exclusive trustee of such trust
while competent. The Stock transferred to
any trust as permitted by this Section shall
be deemed for purposes of this Agreement to
be and remain the Stock of the transferor
Shareholder, and shall be and remain
subject to all of the terms, conditions,
limitations and obligations imposed by this
Agreement.
12. NOTICES. All notice requirements and
other communications required herein shall
be deemed given if in writing and personally
delivered or on the third succeeding
business day after being mailed by
registered or certified mail, return receipt
requested, addressed to the last known
address of the Shareholder on the stock
records of the Corporation, or to such other
address as the Shareholder or the
Corporation shall request pursuant to a
written notice given in accordance with the
terms hereof.
13. BINDING EFFECT. This Agreement shall be
binding upon, and inure to the benefit of,
the Shareholders and their respective
successors, assigns, guardians, heirs and
legal representatives.
14. REMEDIES. The parties hereto
acknowledge and agree that transfer of the
Stock or any interest therein may result in
injury to the parties hereto, and that
damages for breach hereof are not readily
ascertainable and would not adequately
compensate the injured party. As a result
thereof, the injured party will be
irreparably harmed if this Agreement is not
specifically enforced. Therefore, each party
hereto shall have the right to an injunction
for the specific performance of this
Agreement in order to protect the
rights and privileges hereunder. The
Corporation also may refuse to recognize any
purported transferee as a Shareholder and
may continue to treat the transferor as the
Shareholder for all purposes, including,
without limitation, for purposes of dividend
and voting rights, until all applicable
provisions of this Agreement have been
satisfied. These remedies shall, however, be
cumulative and not exclusive, and shall be
in addition to all the rights of action and
remedies which the parties may have under
this Agreement or at law or in equity.
15. ACTION OR DISSENT BY SHAREHOLDER. In
the event a Shareholder commences an action
for dissolution of the Corporation or other
relief under Delaware corporate law, the
Corporation shall, for a period of ninety
(90) days after such an action is served
upon the Corporation or election to dissent
is filed with the Corporation, have the
option to purchase all of the shares of the
Stock by giving written notice to the
Shareholder of the exercise thereof. The
sale by the Shareholder and purchase by the
Corporation shall be at the price and upon
the terms set forth in Sections 6 and 7
above. The Shareholder hereby agrees that
the ?fair value? of the Stock in any action
seeking relief under Delaware corporate law
shall be the Purchase Price of the Stock as
determined under Section 5 above.
16. CONSTRUCTION. All the clauses of this
Agreement are distinct and severable and,
if any clause shall be deemed illegal, void
or unenforceable, it shall not affect the
validity, legality or enforceability of any
other clause or provision of this Agreement.
17. ENTIRE AGREEMENT AND AMENDMENT. This
Agreement contains the entire agreement with
respect to the matters described herein and
is a complete and exclusive statement of the
terms thereof and supersedes all previous
agreements with respect to such matters,
including, without limitation, any prior
Shareholders or voting agreement among all
or some of the parties hereto and dealing
with the same subject matter of this
Agreement, none of which shall have any
further force or effect. This Agreement may
not be altered or modified except by a
writing signed by the Corporation and all of
the Shareholders.
18. GOVERNING LAW AND CHOICE OF FORUM. New
Jersey law shall govern the construction and
enforceability of this Agreement. Any and
all actions concerning any dispute arising
hereunder shall be filed and maintained only
in a state or federal court sitting in the
State of New Jersey.
19. ADDITIONAL SHAREHOLDER. Notwithstanding
anything to the contrary contained herein,
if the Corporation shall issue additional
shares of its preferred and common stock,
any purchaser of such shares of preferred
and common stock may become a party to this
Agreement by executing and delivering an
additional counterpart signature page to
this Agreement and shall be deemed a
?Shareholder? hereunder.?
20. COUNTERPARTS. This Agreement may be
executed in counterparts, each of which
shall constitute an original, and all of
which together shall constitute one and the
same instrument.
SIGNATURES ON FOLLOWING PAGE
?
The parties have caused this Agreement to be
effective as of the day and year first set
forth above.
THE CORPORATION:
SENSORY PERFORMANCE TECHNOLOGY, INC
Ben White
Title: CEO/President
Oliver Marmol
Kim Lavine
?
SCHEDULE I
PREFERRED STOCK SHAREHOLDERS
Name Address Shares of Stock
Ben White 26 East 12 Street
Linden, NJ 07036 250
Oliver Marmol 5500 Military Trail #22-196
Jupiter, FL 33458 125
Kim Lavine 17557 Grand River Avenue
Spring Lake, MI 49456 50
Outstanding Shares 575
COMMON STOCK SHAREHOLDERS
Name Address Shares of Stock
Ben White 26 East 12 Street
Linden, NJ 07036 1,000,000
Oliver Marmol 5500 Military Trail #22-196
Jupiter, FL 33458 125,000
Kim Lavine 17557 Grand River Avenue
Spring Lake, MI 49456 50,000
Outstanding Shares 3,825,000
EX1A-1 UNDR AGMT
5
spt-operatingagreement.txt
SPT OPERATING AGREEMENT
OPERATING AGREEMENT OF SENSORY PERFORMANCE
TECHNOLOGY, INC.
(A Delaware Corporation ? S Class)
Table of Contents Page
ARTICLE I - ORGANIZATION 1
Section 1.01 Organization 1
Section 1.02 Name of Company 1
Section 1.03 Purpose. 1
Section 1.04 Legal Status of Company 1
Section 1.05 Definitions 1
ARTICLE II - MEMBERS 1
Section 2.01 Initial Members 1
Section 2.02 Additional Members 1
Section 2.03 Membership Interest 2
Section 2.04 Investment and Securities
Matters 2
Section 2.05 Information 2
Section 2.06 Liability to Third Parties
2
Section 2.07 Voting Rights 2
Section 2.08 Annual Meeting 3
Section 2.09 Special Meetings 3
Section 2.10 Notice of Annual and Special
Meetings 3
Section 2.11 Attendance at Meetings 3
Section 2.12 Member to Vote in Person or
by Proxy 3
Section 2.13 Action by Written Consent
4
Section 2.14 Participation by
Communication Equipment 4
Section 2.15 No Authority to Commence
Civil Suit 4
Section 2.16 Independent Activities 4
Section 2.17 Transactions Permitted With
Members and Affiliates 4
ARTICLE III - MANAGERS 4
Section 3.01 General Powers 4
Section 3.02 Number and Term of Office
5
Section 3.03 Limitation of Authority of
Members 5
Section 3.04 Authority to Execute
Documents 5
Section 3.05 Annual and Regular Meetings
5
Section 3.06 Special Meetings 5
Section 3.07 Managers to Have One Vote
Each 5
Section 3.08 Action by Unanimous Written
Consent 6
Section 3.09 Participation by
Communicating Equipment 6
Section 3.10 Resignation and Removal of
Managers 6
Section 3.11 Vacancies 6
Section 3.12 Duties of the Chairman of the
Managers 6
Section 3.13 Discharge of Duties; Reliance
on Reports 6
Section 3.14 Accountable as Trustee 7
Section 3.15 Officers 7
Section 3.16 Removal, Resignation or
Replacement of Officers 7
ARTICLE IV - LIMITATION OF LIABILITY AND
INDEMNIFICATION 7
Section 4.01 Limitation of Personal
Liability for Managers 7
Section 4.02 Indemnification 7
Section 4.03 Liability Insurance 8
ARTICLE V - CAPITAL CONTRIBUTIONS 8
Section 5.01 Initial Contributions;
Membership Interest 8
Section 5.02 Subsequent Contributions 8
Section 5.03 Failure to Make Additional
Contribution 8
Section 5.04 Contribution Returns 8
Section 5.05 Loans by Members 9
Section 5.06 Income Accounts 9
Section 5.07 Capital Accounts 9
ARTICLE VI - ALLOCATIONS AND DISTRIBUTIONS
9
Section 6.01 Allocations 9
Section 6.02 Distributions 9
ARTICLE VII - WITHDRAWAL; TRANSFERABILITY
OF MEMBERSHIP INTEREST 10
Section 7.01 No Withdrawal of Member 10
Section 7.02 Transferability of Membership
Interest 10
ARTICLE VIII - TAXES 10
Section 8.01 Tax Returns 10
Section 8.02 Tax Elections 10
Section 8.03 Tax Matters Member 10
Section 8.04 Banking and Accounts 10
Section 8.05 Indemnification of Tax
Matters Member 11
ARTICLE IX - DISSOLUTION, LIQUIDATION AND
TERMINATION 11
Section 9.01 Dissolution 11
Section 9.02 Certificate of Dissolution
11
Section 9.03 Winding Up 11
Section 9.04 Liquidation and Termination
11
Section 9.05 Deficit Capital Accounts 12
ARTICLE X - GENERAL PROVISIONS 13
Section 10.01 Books and Records 13
Section 10.02 Invalidity 13
Section 10.03 Waiver 13
Section 10.04 Choice of Law and Choice of
Forum 13
Section 10.05 Counterparts 13
Section 10.06 Further Assistance 13
Section 10.07 Conflict With Statute 14
Section 10.08 Amendment 14
Section 10.09 Construction 14
Section 10.10 Entire Agreement 14
Section 10.11 Acknowledgment and Waiver
14
OPERATING AGREEMENT OF SENSORY PERFORMANCE
TECHNOLOGY, INC
(Delaware Corporation ? S Class)
THIS OPERATING AGREEMENT of SENSORY
PERFORMANCE TECHNOLOGY, INC. (the ?Company?)
dated as of March 28th, 2016, is hereby
adopted and agreed to, for good and valuable
consideration, by the Members (as defined
below) and the Company.
ARTICLE I - ORGANIZATION
Section 1.01 Organization. Pursuant to the
Delaware Corporation General Law, the
Company has been organized as a Delaware
Corporation by filing Articles of
Organization (the ?Articles?) with the
Delaware Division of Corporations.
Section 1.02 Name of Company. The name of
the Company shall be SENSORY PERFORMANCE
TECHNOLOGY, INC. All business of the
Company shall be transacted in that name or
in other names that are selected by the
Company from time to time and are in
compliance with the Delaware Corporation
General Law.
Section 1.03 Purpose. The purpose or
purposes for which the Company is organized
is to engage in any activity for which
corporations may be organized under Delaware
Corporation General Law. The Company shall
have all the powers necessary or convenient
to effect any purpose for which it is
formed, including all powers granted by
Delaware Corporation General Law.
Section 1.04 Legal Status of Company. The
Members do not intend that the Company be a
co-partnership, limited partnership or
corporation, except for purposes of federal
and state tax law, and none of the Members
or Managers (as defined below) of the
Company is a partner of any other Member or
Manager as a result of becoming a Member or
Manager of the Company, and this Agreement
shall not be construed as providing
otherwise.
Section 1.05 Definitions. Terms used
herein which are not otherwise defined shall
have the meaning, if given, by Delaware
Corporation General Law. Any reference
herein to the ?Agreement? shall include any
other operating agreement adopted by the
Members and the Company.
ARTICLE II - MEMBERS
Section 2.01 Initial Members. The initial
Members of the Company are the persons
executing this Agreement effective as of the
date hereof as Members and each such initial
Member is admitted to the Company as a
Member effective upon such execution (the
?Initial Members?). The Initial Members
along with any Additional Members admitted
pursuant to Section 2.02 shall constitute
the ?Members? of the Company.
Section 2.02 Additional Members.
Additional Members may be admitted, and the
capital contribution to be made thereby
shall be set, only upon the approval of 100%
of the existing Members (the ?Additional
Members?), except as set forth in a
Membership Transfer Restriction Agreement or
other written agreement executed by all of
the Members and the Company.
Section 2.03 Membership Interest. The
Company is authorized to issue up to
5,000,000 units of Membership Interest in
Common Stock and 1,000 units of Membership
Interest in Preferred Stock (as defined by
Delaware Corporation General Law).
Section 2.04 Investment and Securities
Matters. Each of the Members hereby
represents, acknowledges and agrees as of
the date of this Agreement and as of the
date on which any of them may acquire
additional Membership Interests in the
Company under this Agreement that:
(a) The Member, or the financial advisor or
counselor of the Member, if any, is
knowledgeable and experienced in financial
and business matters.
(b) The Member is purchasing the Membership
Interest for the investment of the Member
and not with a view to the distribution or
resale thereof.
(c) The Member did not learn of or discover
the opportunity to purchase the Membership
Interest by virtue of any general
advertising or general solicitations through
advertisement, article, notice, or other
communication published in any newspaper,
magazine, or similar media; or by any
broadcast over radio or television; or by
any seminar or meetings whose attendees have
been invited by any general solicitation or
general advertising.
(d) The Member acknowledges that no
commission or other remuneration has been
paid by the Member or, to the knowledge of
the Member, by any other person with respect
to the Membership Interest.
Section 2.05 Information. In addition to
the other rights specifically set forth in
this Agreement, each Member is entitled to
all information to which that Member is
entitled to have access pursuant to Delaware
Corporation General Law, under the
circumstances and subject to the conditions
therein stated, including, without
limitation, the books, records of account,
business records, the Articles and this
Agreement.
Section 2.06 Liability to Third Parties.
Unless provided by law or expressly assumed,
a person who is a Member or Manager, or
both, shall not be liable for the acts,
debts or liabilities of the Company,
including those under a judgment, decree or
order of a court.
Section 2.07 Voting Rights. Each Member
shall be entitled to vote on all matters to
be submitted for a vote by the Members,
including the selection of Managers, in
proportion to such Member?s Membership
Interest (as defined in Section 5.01) of
the Company; and the approval of all such
matters and the selection of Managers shall
be by majority vote of the Membership
Interest at an annual or special meeting of
the Members (a ?Majority Vote?), unless a
higher percentage is required for approval
elsewhere in this Agreement.
Notwithstanding Section 3.01 below, or any
other provision contained in this Agreement
to the contrary, the following actions shall
require the approval by Majority Vote of the
Members or such higher percentage as may be
specified here or elsewhere in this
Agreement: (a) election and compensation of
Managers; (b) distributions of profits and
losses to the Members; (c) amendments to the
Articles or this Agreement (100% required
for approval); (d) approval of any merger,
consolidation, liquidation or dissolution;
(e) sale, exchange, lease or other transfer
of all or substantially all of the Company?s
assets; (f) change in any Member?s
Membership Interest relative to all other
Members (100% required for approval); (g)
establishment of the consideration to be
accepted for the sale of any Membership
Interest in the Company; (h) incurring
indebtedness for borrowed money in excess of
$100,000 at any time outstanding; (i)
creation of any mortgage, pledge, lien,
charge or encumbrance upon any of the assets
now owned or hereafter acquired by the
Company or disposition of any such property
or assets except in the ordinary course of
business; (j) approval of capital
expenditures or capital additions or
improvements in excess of $50,000; (k) the
guaranty of obligations of any other person
or entity except for endorsement of
negotiable instruments for deposit in the
ordinary course of business; (l) any
material change in the character of the
business and affairs of the Company; or (m)
tax elections (Majority Vote unless a higher
percentage is required by the tax laws).
Section 2.08 Annual Meeting. An annual
meeting of the Members, for the election of
Managers and for the transaction of other
business as may come before the meeting, may
be held in each year either in or outside
the State of New Jersey on the 1st day of
May at 10:00 a.m. (or if such is a legal
holiday, then on the next succeeding
business day), or at any other time and date
as shall be fixed from time to time by
resolution of the Members.
Section 2.09 Special Meetings. Any Member
or Members with at least 25% of the
Membership Interests, or the Managers acting
collectively, may call a meeting of the
Members for any reasonable time at the
principal office of the Company, or such
other place in or outside the State of New
Jersey, upon giving proper notice to all the
Members.
Section 2.10 Notice of Annual and Special
Meetings. The Chairman, or if no Chairman
has been elected, any Manager shall cause
notice of the time, place and purposes of
each meeting of the Members to be personally
delivered, sent via facsimile or mailed, at
least five (5) days but not more than sixty
(60) days prior to the meeting, to each
Member of record entitled to vote at the
meeting. Notice shall be deemed given upon
deposit in the United States mail addressed
to the address of the Member as revealed on
the records of the Company. Notice of a
meeting of Members need not be given to any
Member who signs a waiver of notice in
writing, whether before or after the time of
the meeting. The notice shall state the
nature of the business to be transacted and
the matters, if any, upon which the Members
will be requested to vote; provided,
however, that action may be taken on any
matter brought before a meeting of the
Members regardless of whether such matter is
set forth in the notice. Notice of any
adjourned meeting of the Members of the
Company need not be given if the time and
place to which the meeting is adjourned are
announced at the meeting at which the
adjournment is taken.
Section 2.11 Attendance at Meetings.
Attendance of a person at a meeting of
Members in person or by proxy constitutes
waiver of objection to lack of notice or
defective notice of the meeting, unless the
Member at the beginning of the meeting
objects to holding the meeting or
transacting business at the meeting.
Section 2.12 Member to Vote in Person or
by Proxy. A Member entitled to vote at a
meeting of Members or to express consent or
dissent without a meeting shall be entitled
to vote in person, or by proxy appointed by
an instrument in writing authorizing other
persons to act. A proxy shall be signed by
the Member or authorized agent or
representative and shall not be valid after
the expiration of three (3) years from its
date unless otherwise provided.
Section 2.13 Action by Written Consent.
Any action required or permitted to be taken
at a meeting of Members may be taken without
a meeting, without prior notice and without
a vote, if consents in writing, setting
forth the action so taken, are signed by
Members representing the Membership
Interests of the Company required to
authorize the action, and are delivered to
the Company. Prompt notice of the taking of
the action without a meeting by less than
unanimous written consent shall be given to
Members who have not consented in writing.
Section 2.14 Participation by
Communication Equipment. A Member may
participate in a meeting of the Members by a
conference telephone or by other similar
communications equipment through which all
persons participating in the meeting may
communicate with the other participants.
All participants shall be advised of the
communications equipment and the names of
the parties in the conference shall be
divulged to all participants. Participation
in a meeting pursuant to this section
constitutes presence in person at the
meeting.
Section 2.15 No Authority to Commence
Civil Suit. No Member shall have the
authority to commence and maintain a civil
suit in the right of the Company, and no
such civil suit shall be commenced and
maintained in the right of the Company,
except upon Majority Vote of the Members,
approval of the Managers or as provided
Delaware Corporation General Law.
Section 2.16 Independent Activities. Any
Member or Former Member may, notwithstanding
the existence of this Agreement, engage in
whatever other activities such Member
chooses, so long as they do not compete with
the Company or otherwise for a period of
five years, without having or incurring any
obligation to offer any interest in such
activities to the Company or to any other
party to this Agreement.
Section 2.17 Transactions Permitted With
Members and Affiliates. The validity of any
transaction, agreement or payment involving
the Company, the Members or any affiliate
thereof otherwise permitted by the terms of
this Agreement shall not be affected by
reason of the relationship between any
Member and such affiliate or by reason of
the approval of said transaction, agreement
or payment by any Member.
ARTICLE III - MANAGERS
Section 3.01 General Powers. Except as
otherwise provided in this Agreement,
including, without limitation, Section 2.06
above, the property, affairs, and business
of the Company shall be managed by the
Managers, and the Managers may exercise all
of the powers of the Company, whether
derived from law, the Articles or otherwise.
Each of the Members shall only act as a
member under the Delaware Corporation
General Law, and the Members shall have no
managerial power unless explicitly
authorized by this Agreement. Each Manager
has the power, on 100% approval of all
Managers, on behalf of the Company, to do
all things necessary or convenient to carry
out the business and affairs of the Company,
including the power to: (a) purchase, lease
or otherwise acquire any real or personal
property; (b) sell, convey, mortgage, grant
a security interest in, pledge, lease,
exchange or otherwise dispose of or encumber
any real or personal property; (c) open one
or more depository accounts and make
deposits into and checks and withdrawals
against such accounts; (d) borrow money and
incur liabilities and other obligations; (e)
enter into any and all agreements and
execute any and all contracts, documents and
instruments; (f) engage employees and
agents, define their respective duties and
establish their compensation or
remuneration; (g) establish pension plans,
trusts, profit sharing plans and other
benefit and incentive plans for Members,
employees and agents of the Company; (h)
obtain insurance covering the business
affairs and property of the Company and on
the lives and well being of its Members,
employees and agents; (i) commence,
prosecute or defend any proceeding in the
Company?s name; and (j) participate with
others in partnerships, joint ventures and
other associations and strategic alliances.
Section 3.02 Number and Term of Office.
The number of Managers of the Company shall
be not less than one (1) and not more than
twenty-five (25) and shall be determined
from time to time by the Members. A Manager
shall hold office for the term elected,
until a successor is elected and qualified
or until death, resignation or removal. The
Managers shall be elected on an annual
basis. The election as a Manager does not
of itself create any contract rights.
Section 3.03 Limitation of Authority of
Members. No Member (other than a Member who
is a Manager) has the authority or power to
act for or on behalf of the Company, to do
any act which would be binding on the
Company or to incur any expenditure on
behalf of the Company. The Managers have
all agency authority described in Delaware
Corporation General Law.
Section 3.04 Authority to Execute
Documents. All deeds, documents, contracts,
agreements, bonds, debentures, notes,
obligations, evidences of indebtedness,
checks, drafts and other instruments
requiring execution by the Company shall be
executed and delivered by one or more
Managers as may from time to time be
authorized by the Managers. All funds of
the Company not otherwise employed shall be
deposited to the credit of the Company in
such financial institutions as designated by
the Managers. The Managers may execute or
cause to be executed, in the name and on
behalf of the Company, as the holder of
stock or other securities in any entity, all
written proxies, powers of attorney or other
written instruments as the Managers may deem
necessary for the Company to exercise such
powers and rights.
Section 3.05 Annual and Regular Meetings.
The annual meeting of the Managers, for the
election of officers (if any) and for the
transaction of other business as may come
before the meetings, shall be held in each
year either in or outside the State of New
Jersey as soon as possible after the annual
meeting of the Members on the same day and
at the same place as the annual meeting of
the Members. Notice of the annual meeting
of the Managers shall not be required.
Notice of regular meetings, if set by
resolution of the Managers, need not be
given; provided, however, that in case the
Managers shall change the time or place of
regular meetings, notice of this action
shall be promptly given in person or by
telephone to each Manager who shall not have
been present at the meeting at which the
action was taken.
Section 3.06 Special Meetings. Special
meetings of the Managers shall be held
whenever called by the Chairman of the
Managers (if any) or by 25% or more of the
Managers, at such time and place as may be
specified in the notice or waiver of notice.
Special meetings of the Managers may be
called on 24 hours? notice to each Manager,
given personally, by facsimile or by
telephone, or on 3 days? written notice.
Written notice shall be deemed given upon
deposit in the United States mail addressed
to the address of the Manager as revealed on
the records of the Company. Notice of any
special meeting need not be given to any
Manager who shall be present at the meeting,
or who shall waive notice of the meeting in
writing, whether before or after the time of
the meeting. No notice need be given of any
adjourned special meeting if the time and
place to which the meeting is adjourned are
announced at the meeting at which the
adjournment is taken.
Section 3.07 Managers to Have One Vote
Each. Each Manager shall have one vote.
Except as otherwise required by the Delaware
Corporation General Law or the Articles, all
matters presented to a vote of the Managers
shall be decided by a majority vote of the
Managers.
Section 3.08 Action by Unanimous Written
Consent. Any action required or permitted
to be taken at any meeting of the Managers
may be taken without a meeting if, under
authorization voted before or after the
action, written consents thereto are signed
by all Managers then in office and such
written consents are filed with the minutes
of the proceedings of the Managers.
Section 3.09 Participation by
Communicating Equipment. A Manager may
participate in a meeting of the Managers by
a conference telephone or by other similar
communications equipment through which all
persons participating in the meeting may
communicate with the other participants.
All participants shall be advised of the
communications equipment and the names of
the parties in the conference shall be
divulged to all participants. Participation
in a meeting pursuant to this section
constitutes presence in person at the
meeting.
Section 3.10 Resignation and Removal of
Managers. Any Manager may resign at any
time by delivering a written resignation to
the remaining Managers and such resignation
shall be effective upon receipt thereby or
at a subsequent time as set forth in the
notice of resignation. Any of the Managers
may be removed from office at any time, with
cause, upon Majority Vote of the Members.
Section 3.11 Vacancies. If any Manager
vacancies shall occur, by reason of death,
resignation, removal or otherwise, or if the
authorized number of Managers shall be
increased, the Managers then in office shall
continue to act, and the vacancies shall be
filled by vote of a majority of the Managers
then in office; provided, however, that a
Manager appointed to fill such vacancy shall
only hold office until the next election of
Managers by the Members.
Section 3.12 Duties of the Chairman of the
Managers. The Chairman of the Managers,
Company CEO and President Ben White, shall
preside at all meetings of the Managers and
Members and shall have the power to assign
such other duties to the Managers.
Section 3.13 Discharge of Duties; Reliance
on Reports. A Manager shall discharge his
or her duties as a Manager in good faith,
with the care an ordinarily prudent person
in a like position would exercise under
similar circumstances and in a manner he or
she reasonably believes to be in the best
interests of the Company. In discharging
his or her duties, a Manager may rely on
information, opinions, reports or
statements, including financial statements
and other financial data, if prepared or
presented by any of the following:
(a) One or more other Managers, or Members,
or employees of the Company whom the Manager
reasonably believes to be reliable and
competent in the matter presented.
(b) Legal counsel, professional
accountants, engineers or other persons as
to matters the Manager reasonably believes
are within the person?s professional or
expert competence.
(c) A committee of Managers of which he or
she is not a member if the Manager
reasonably believes the committee merits
confidence.
A Manager is not entitled to rely on the
information, opinions, reports, or
statements set forth in this section if the
Manager has knowledge concerning the matter
in question that makes reliance otherwise
permitted by this provision unwarranted. A
Manager is not liable for an action taken as
a Manager or the failure to take any action
if he or she performs the duties of his or
her office in compliance with this section.
Section 3.14 Accountable as Trustee. A
Manager shall account to the Company and
hold as trustee for it any profit or benefit
derived by the Manager from any transaction
connected with the conduct or winding up of
the Company or from any personal use by the
Manager of its property.
Section 3.15 Officers. The Company may
have three or more officers. The initial
three officers will be Ben White - Chief
Executive Officer, Oliver Marmol - Chief
Strategy Officer, Todd Hines - Chief
Production Officer. Additional officers
shall be elected or appointed by the
Managers (in accordance with Section 3.07),
and who shall have the title, authority and
duties as authorized or directed by the
Managers. An officer shall hold office for
the term of two years for which elected or
appointed and until a successor is elected
or appointed and qualified, or until
resignation or removal.
Section 3.16 Removal, Resignation or
Replacement of Officers. An officer elected
or appointed by the Managers may be removed
by the Managers with just cause. The
removal of an officer shall be without
prejudice to his or her contract rights, if
any. The election or appointment of an
officer does not of itself create contract
rights. An officer may resign by written
notice to the Company, which resignation is
effective upon its receipt by the Company or
at a subsequent time specified in the notice
of resignation. Vacancies in any office may
be filled by unanimous vote of the Managers
and/or Board of Directors.
ARTICLE IV - LIMITATION OF LIABILITY AND
INDEMNIFICATION
Section 4.01 Limitation of Personal
Liability for Managers. A Manager of the
Company shall not be personally liable to
the Company or its Members for monetary
liability for breach of duty as established
in Delaware Corporation General Law except
that this provision does not eliminate or
limit the liability of a Manager for any of
the following:
(a) The receipt of a financial benefit for
which the Manager is not entitled.
(b) A knowing violation of law.
(c) An act or omission occurring before the
effective date of this Agreement.
Any repeal, amendment or other modification
of this Section shall not adversely affect
any right or protection of a Manager of the
Company existing at the time of such repeal,
amendment or other modification.
Section 4.02 Indemnification. The
Company, to the extent authorized by the
Managers or the Members, may indemnify a
Member, Manager, officer, employee or agent,
who was or is a party or is threatened to be
made a party to a threatened, pending or a
completed action, suit or proceeding,
whether civil, criminal, administrative or
investigative, and whether formal or
informal, by reason of the fact that he or
she is or was a Member, Manager, officer,
employee or agent of the Company, or is or
was serving at the request of the Company as
a director, officer, member, manager,
partner, trustee, employee or agent of
another foreign or domestic corporation,
partnership, limited liability company,
joint venture, trust or other enterprise,
whether for profit or not, against expenses,
including attorneys? fees, judgments,
penalties, fines and amounts paid in
settlement actually and reasonably incurred
by him or her in connection with the action,
suit or proceeding. The Company may pay or
reimburse the reasonable expenses incurred
by an indemnity in advance of final
disposition of the proceeding, to the extent
authorized by the Managers or the Members.
Section 4.03 Liability Insurance. The
Company shall have the power to purchase and
maintain insurance on behalf of any person
who is or was a Member, Manager, officer,
employee or agent of the Company, or is or
was serving at the request of the Company as
a director, officer, member, manager,
partner, trustee, employee or agent of
another corporation, partnership, limited
liability company, joint venture, trust or
other enterprise against any liability
asserted against such person and incurred by
such person in any such capacity or arising
out of such person?s status as such, whether
or not the Company would have the power to
indemnify such person against such liability
under the provisions of this Article or the
Delaware Corporation General Law.
ARTICLE V - CAPITAL CONTRIBUTIONS
Section 5.01 Initial Contributions;
Membership Interest. The Members shall make
the capital contributions to the Company as
set forth on Exhibit ?A? attached, which
contributions shall be paid within 10 days
of the date of this Agreement. The
respective rights of each Member in the
Company, including, without limitation, the
right to receive distributions of the
Company?s assets and any right to vote or
participate in management (the ?Membership
Interest?), shall be in proportion to the
Membership Interests as set forth in Exhibit
?A? attached, as may be adjusted from time
to time as provided in this Agreement.
Services may be contributed as all or part
of any Member?s capital contribution to the
extent permitted under Delaware Corporation
General Law.
Section 5.02 Subsequent Contributions. No
Member shall be required to contribute any
additional capital to the Company except
upon unanimous approval of the Members. In
the event of such vote, all Members shall be
notified of the date on which the additional
capital contributions shall be made, which
date shall be at least twenty (20) days
after the notice. Each Member shall
contribute a percentage of the additional
capital which is equal to that Member?s
Membership Interest in the Company. Should
any Member decline to contribute to the
Company the amount of any additional
required capital contribution within the
time so specified, the remaining Members
shall have the option of contributing the
additional contributions.
Section 5.03 Failure to Make Additional
Contribution. Upon the failure by a Member
to make the full amount of any additional
capital contribution described in Section
5.02 above, the Membership Interests of the
Members shall be reallocated so that the
noncontributing Members? percentage
interests in the Company shall be reduced as
provided herein to reflect the failure to
make the required capital contribution, and
the Members making such contributions shall
be allocated a percentage interest in the
Company to equitably reflect such
contribution.
Section 5.04 Contribution Returns. A
Member is not entitled to the return of any
part of the Member?s capital contributions
or to be paid interest in respect of either
the capital account or the capital
contributions. An unrepaid capital
contribution is not a liability of the
Company or of any Member. A Member is not
required to contribute or to lend any cash
or property to the Company to enable it to
return any Member?s capital contribution.
Section 5.05 Loans by Members. Should the
Company lack sufficient cash to pay its
obligations, any Member that may agree to do
so may advance all or part of the needed
funds to or on behalf of the Company. An
advance described in this section
constitutes a loan from the Member to the
Company, bears interest at the interest rate
agreed to by the Company and the lending
Member from the date of the advance until
the date of payment, and is not a capital
contribution.
Section 5.06 Income Accounts. An
individual income account shall be
maintained for each Member. At the end of
each fiscal year each Member?s share of net
profits or net losses of the Company, if not
previously credited or debited, shall be
credited or debited to such Member?s income
account. After such amounts have been
credited or debited to such Member?s income
account, any balance or deficit remaining in
such account at the end of such fiscal year
shall be transferred to or charged against
such Member?s capital account.
Section 5.07 Capital Accounts. A capital
account shall be maintained for each Member.
The capital account for each Member shall
consist of: (a) that Member?s initial
contribution to capital, if any; (b) any
amounts that have been assigned from such
Member?s capital account to another Member?s
capital account as a result of a sale,
devise or transfer of their interest or a
part thereof in the Company; (c) any
additional capital contributions; and (d)
any amounts transferred from a Member?s
income account to their capital account
pursuant to this Agreement and reduced by
all distributions and reductions of Company
capital.
ARTICLE VI - ALLOCATIONS AND DISTRIBUTIONS
Section 6.01 Allocations. Except as may
be required by Section 704(c) of the
Internal Revenue Code of 1986, as amended
(the ?Code?), and Treasury Regulation
?1.704-1(b)(2)(iv)(f)(4) (or successor
statutory or regulatory provisions); all
items of income, gain, loss, deduction, and
credit of the Company shall be allocated
among the Members in accordance with their
proportional Membership Interest. All items
of income, gain, loss, deduction and credit
allocable to any Membership Interest that
may have been transferred or reallocated
shall be allocated between the transferor
and transferee based upon the portion of the
tax year during which each was recognized as
owning that Membership Interest, without
regard to the results of Company operations
during any particular portion of that tax
year and without regard to whether cash
distributions were made to the transferor or
the transferee during that tax year;
provided, however, that this allocation must
be made in accordance with a method
permissible under Section 706 of the Code
and the regulations thereunder.
Section 6.02 Distributions. Except as
otherwise provided in this Agreement, the
Company may pay such distributions to the
Members as may be agreed upon by Majority
Vote of the Members and shall be permitted
under the Delaware Corporation General Law.
Cash available for distribution shall be
determined at least annually and shall be
distributed at such times as determined by
Majority Vote of the Members that funds are
available therefor, taking into account the
reasonable business needs of the Company.
All distributions shall be made to the
Members in accordance with their
proportional Membership Interests.
ARTICLE VII - WITHDRAWAL; TRANSFERABILITY
OF MEMBERSHIP INTEREST
Section 7.01 No Withdrawal of Member. A
Member does not have the right or power to
voluntarily withdraw from the Company as a
Member, except as specifically set forth in
a Membership Interest Transfer Restriction
Agreement or other written agreement
executed by all of the Members and the
Company.
Section 7.02 Transferability of Membership
Interest. Except as specifically permitted
in this Agreement, a Membership Interest
Transfer Restriction Agreement or other
written agreement executed by all of the
Members and the Company, no Member shall
sell or otherwise transfer any portion of
the Member?s Membership Interest in the
Company in any manner, voluntarily or
involuntarily, including, without
limitation, by sale, gift, granting an
option to purchase, bequest, descent, device
or operation of law, or any other
disposition. Any transfer of Membership
Interest in violation of this Section shall
be deemed an assignment of such Membership
Interest within the Delaware Corporation
General Law and does not entitle the
assignee to participate in the management or
affairs of the Company or to become or
exercise any rights of a Member.
ARTICLE VIII - TAXES
Section 8.01 Tax Returns. The Tax Matters
Member (as defined below) shall cause to be
prepared and filed all necessary federal and
state income tax returns for the Company,
including making the elections described in
Section 8.02. Each Member shall provide the
Tax Matters Member with all pertinent
information in its possession relating to
Company operations that is necessary for the
Company to prepare and file its income tax
returns.
Section 8.02 Tax Elections. Pursuant to
Section 2.06 hereof, the Members by Majority
Vote, except to the extent a higher
percentage is required by the Code or
regulations thereunder, may elect certain
tax classifications for the Company,
including, without limitation, being taxed
as a partnership or corporation for federal
income tax purposes.
Section 8.03 Tax Matters Member. An
individual Member appointed by the Members
shall be designated as the ?tax matters
partner? of the Company pursuant to Section
6231(a)(7) of the Code (the ?Tax Matters
Member?); and shall take such action as may
be necessary to cause each other Member to
become a ?notice partner? within the meaning
of Section 6223 of the Code, shall inform
each other Member of all significant matters
that may come to its attention in its
capacity as ?tax matters partner? by giving
notice thereof on or before the fifth
business day after becoming aware thereof
and, within that time, shall forward to each
other Member copies of all significant
written communications it may receive in
that capacity. Any Member who is designated
?tax matters partner? may not take any
action contemplated by Sections 6222 through
6233 of the Code without the approval by
Majority Vote of the Members, but this
sentence does not authorize such Member (or
any other Member) to take any action left to
the determination of an individual Member
under Sections 6222 through 6233 of the
Code.
Section 8.04 Banking and Accounts. All
funds of the Company shall be deposited in a
separate bank account or accounts as shall
be determined by the Managers. All
withdrawals therefrom shall be made upon
checks signed by the person authorized to do
so by the Managers.
Section 8.05 Indemnification of Tax
Matters Member. The Company shall defend,
indemnify and hold harmless the Tax Matters
Member from all expenses including, without
limitation, legal and accounting fees,
claims, liabilities, losses and damages
incurred in connection with the performance
of such Member as Tax Matters Member.
Neither the Members nor the Managers, nor
any other person or affiliate of the Company
shall have any obligation to provide funds
for such purpose.
ARTICLE IX - DISSOLUTION, LIQUIDATION AND
TERMINATION
Section 9.01 Dissolution. The Company is
dissolved and its affairs shall be wound up
when the first of the following occurs:
(a) at the time specified in the Articles;
(b) upon the happening of an event
specified in the Articles, or this
Agreement, including a vote of Members;
(c) upon the unanimous vote of all the
Members entitled to vote;
(d) upon the entry of a decree of judicial
dissolution.
Section 9.02 Certificate of Dissolution.
Upon the dissolution and commencement of
winding up the Company, a certificate of
dissolution shall be duly executed and filed
in accordance with Delaware Corporation
General Law.
Section 9.03 Winding Up. Except as
otherwise provided in the Articles, this
Agreement or Delaware Corporation General
Law, the Managers who have not wrongfully
dissolved the Company may wind up the
Company?s affairs. The Managers who are
winding up the Company?s affairs shall
continue to function, for the purpose of
winding up, in accordance with the
procedures determined by Delaware
Corporation General Law, the Articles, and
this Agreement, shall be held to no greater
standard of conduct than that required by
Delaware Corporation General Law and shall
be subject to no greater liabilities than
would apply in the absence of dissolution.
The Company may sue and be sued in its name
and process may issue by and against the
Company in the same manner as if dissolution
had not occurred. An action brought by or
against the Company before its dissolution
does not abate because of the dissolution.
Section 9.04 Liquidation and Termination.
Upon dissolution of the Company, one or more
Managers shall serve as liquidator. The
liquidator shall proceed diligently to wind
up the affairs of the Company and make final
distributions as provided herein and in
Delaware Corporation General Law. The costs
of liquidation shall be borne as a Company
expense. Until final distribution, the
liquidator shall continue to operate the
Company properties with all of the power and
authority of the Managers. The steps to be
accomplished by the liquidator are as
follows:
(a) As promptly as possible after
dissolution and again after final
liquidation, the liquidator shall cause a
professional accountant to make a proper
accounting of the Company?s assets,
liabilities, and operations through the last
day of the calendar month in which the
dissolution occurs or the final liquidation
is completed, as applicable.
(b) The liquidator shall cause the notice
required by Delaware Corporation General Law
to be mailed to each known creditor of and
claimant against the Company and the notice
and to be published in the manner described
therein.
(c) The assets shall be distributed in
accordance with Delaware Corporation General
Law, except as set forth in (d) below.
(d) The distribution of assets to the
Members shall be as follows:
(i) The liquidator may sell any or all
Company property, including to Members, and
any resulting gain or loss from each sale
shall be computed and allocated to the
capital accounts of the Members;
(ii) With respect to all Company property
that has not been sold, the fair market
value of that property shall be determined
and the capital accounts of the Members
shall be adjusted to reflect the manner in
which the unrealized income, gain, loss, and
deduction inherent in property that has not
previously been reflected in the capital
accounts would be allocated among the
Members if there were a taxable disposition
of that property for the fair market value
of that property on the date of
distribution; and
(iii) Company property shall be
distributed among the Members in accordance
with the positive capital account balances
of the Members, as determined after taking
into account all capital account adjustments
for the taxable year of the Company during
which the liquidation of the Company occurs
(other than those made by reason of this
clause (iii)); and those distributions shall
be made by the end of the taxable year of
the Company during which the liquidation of
the Company occurs (or, if later, ninety
(90) days after the date of the
liquidation).
All distributions in kind to the Members
shall be made subject to the liability of
each distributee for costs, expenses and
liabilities theretofore incurred or for
which the Company has committed prior to the
date of termination and those costs,
expenses and liabilities shall be allocated
to the distributee pursuant to this Section.
The distribution of cash and/or property to
a Member in accordance with the provisions
of this Section constitutes a complete
return to the Member of its capital
contributions and a complete distribution to
the Member of its Membership Interest and
all the Company?s property and constitutes a
compromise to which all Members have
consented within the Delaware Corporation
General Law.
Section 9.05 Deficit Capital Accounts.
Notwithstanding anything to the contrary
contained in this Agreement, and
notwithstanding any custom or rule of law to
the contrary, to the extent that the
deficit, if any, in the capital account of
any Member results from or is attributable
to deductions and losses of the Company
(including non-cash items such as
depreciation), or distributions of money
pursuant to this Agreement to all Members in
proportion to their respective Membership
Interests, upon dissolution of the Company
such deficit shall not be an asset of the
Company and such Members shall not be
obligated to contribute such amount to the
Company to bring the balance of such
Member?s capital account to zero.
ARTICLE X - GENERAL PROVISIONS
Section 10.01 Books and Records. The
Company shall keep at its registered office
or principal place of business in the State
of New Jersey all the following:
(a) A current list of the full name and
last known address of each Member and each
Manager.
(b) A copy of the Articles or Restated
Articles of Organization, together with any
amendments to the Articles.
(c) Copies of the Company?s federal, state
and local tax returns and reports, if any,
for the three most recent years.
(d) Copies of any financial statements of
the Company for the three most recent years.
(e) Copies of operating agreements,
including this Agreement.
(f) Copies of records that would enable a
Member to determine the Members? relative
share of the Company?s distributions and the
Members? relative voting rights.
(g) Copies of any Membership Transfer
Restriction Agreements.
Section 10.02 Invalidity. The invalidity
of any provision of this Agreement shall not
affect the validity of the remainder of any
such provision or the remaining provisions
of this Agreement.
Section 10.03 Waiver. The failure of any
party at any time to require performance by
any other party of any provision of this
Agreement shall not be deemed a continuing
waiver of that provision or a waiver of any
other provision of this Agreement and shall
in no way affect the full right to require
such performance from the other party at any
time thereafter.
Section 10.04 Choice of Law and Choice of
Forum. This Agreement shall be governed by
and construed according to the laws of the
State of New Jersey. Any and all actions
concerning any dispute arising hereunder
shall be filed and maintained only in a
state or federal court sitting in the State
of New Jersey, and the parties hereto
specifically consent and submit to the
jurisdiction of such state or federal court.
Section 10.05 Counterparts. This Agreement
may be signed in any number of counterparts
with the same effect as if the signature on
each such counterpart were upon the same
instrument. Each executed copy shall be
deemed an executed original for all
purposes.
Section 10.06 Further Assistance. Each
party shall, at the request of any other
party, furnish, execute and deliver such
other documents as the other party may
reasonably request and shall take such other
actions as any other party shall reasonably
request, provided only that the furnishing
of such documents and taking of such action
shall be necessary and convenient to
consummate or confirm the transactions
contemplated herein.
Section 10.07 Conflict With Statute. In
the event any article or section of this
Operating Agreement shall conflict with the
Delaware Corporation General Law, the
Delaware Corporation General Law shall
control.
Section 10.08 Amendment. This Agreement
may be amended only by unanimous agreement
of the Members and the Company.
Section 10.09 Construction. As used
herein, the term ?Member? or ?Members? and
?Manager? or ?Managers? shall be construed
in the plural or singular as the
circumstances may require. In the event the
Company has only one Member, this Agreement
shall be an agreement between the Company
and the Member regarding the business and
affairs of the Company and is not intended
to be an ?Operating Agreement? within the
definition of Delaware Corporation General
Law.
Section 10.10 Entire Agreement. This
Agreement represents the entire
understanding and agreement between the
parties with respect to the subject matter
hereof and supersedes all prior agreements
or negotiations between such parties.
Section 10.11 Acknowledgment and Waiver.
The Members acknowledge that this Agreement
has been prepared by counsel to the Company
and that each Member has been advised to
obtain separate legal counsel to represent
the legal interests of such Member. Each
Member waives any claims it may have against
the Company?s counsel regarding any conflict
of interest with regard to this matter.
Signatures on following page
IN WITNESS WHEREOF, the Members and the
Company have made this Agreement effective
as of the date first set forth above.
THE COMPANY: COMPANY NAME
By: ______________________________
NAME
Its: Position
THE MEMBERS:
NAME OF ENTITY
By: ___________________________________
Name
Its: Position
_______________________________________
NAME
NAME OF ENTITY
By: ___________________________________
Name
Its: Position
_______________________________________
NAME
_______________________________________
EX1A-15 ADD EXHB
6
spt-restatedarticles.txt
SPT RESTATED ARTICLES OF INCORPORATION
RESTATED CERTIFICATE OF INCORPORATION
OF
SENSORY PERFORMANCE TECHNOLOGY, INC.
SENSORY PERFORMANCE TECHNOLOGY, INC, a corporation
organized and existing under the laws of the State of Delaware,
hereby certifies as follows:
FIRST: The name of this corporation is Sensory Performance
Technology, Incorporated.
SECOND: The original Certificate of Incorporation of the
corporation was filed with the Secretary of Delaware on January
14, 2016, and the original name of the corporation was Sensory
Performance Technology (Delaware), Incorporated.
THIRD: Pursuant to Section 245 of the General Corporation
Law of the State of Delaware, the provisions of the Certificate
of Incorporation as heretofore amended and supplemented are
hereby restated and integrated into the single instrument which
is hereinafter set forth, and which is entitled ?Restated
Certificate of Incorporation of Sensory Performance Technology
Incorporated,? without further amendment and without any
discrepancy between the provisions of the Certificate of
Incorporation as heretofore amended and supplemented and the
provisions of such single instrument as hereinafter set forth.
FOURTH: The Board of Directors of the corporation has duly
adopted this Restated Certificate of Incorporation pursuant to
the provisions of Section 245 of the General Corporation Law of
the State of Delaware in the form set forth as follows:
?
RESTATED CERTIFICATE OF INCORPORATION
OF
SENSORY PERFORMANCE TECHNOLOGY, INC.
I.
The name of this corporation is Sensory Performance Technology
Incorporated.
II.
The address of the registered office of the corporation in the
State of Delaware shall be 2711 Centerville Road, Suite 400,
City of Wilmington, 19809 County of New Castle, and the name of
the registered agent of the corporation in the State of Delaware
at such address is Corporation Service Company.
III.
The purpose of this corporation is to engage in any lawful act
or activity for which a corporation may be organized under the
General Corporation Law of the State of Delaware.
IV.
A. This corporation is authorized to issue two classes of
stock to be designated, respectively, ?Common Stock? and
?Preferred Stock.? The total number of shares which the
corporation is authorized to issue is Five Million One Thousand
(5,001,000) shares. Five Million (5,000,000) shares shall be
Common Stock, each having a par value of one-hundredth of one
cent ($0.0001), and One Thousand (1,000) shares shall be
Preferred Stock, each having a par value of one-hundredth of one
cent ($0.0001).
B. The Preferred Stock may be issued from time to time in one
or more series. The Board of Directors is herby authorized, by
filing a certificate (a ?Preferred Stock Designation?) pursuant
to the Delaware General Corporation Law, to fix or alter from
time to time the designation, powers, preferences and rights of
the shares of each such series and the qualification, limitation
or restrictions of any wholly unissued series of Preferred
Stock, and to establish from time to time the number of shares
constituting any such series or any of them; and to increase or
decrease the number of shares of any series subsequent to the
issuance of shares of that series, but not below the number of
shares of such series then outstanding. In case the number of
shares of any series shall be decreased in accordance with the
foregoing sentence, the shares constituting such decrease shall
resume the status that they had prior to the adoption of the
resolution originally fixing the number of shares of such
series.
V.
For the management of the business and for the conduct of the
affairs of the corporation, and in further definition,
limitation and regulation of the powers of the corporation, of
its directors and of its stockholders or any class thereof, as
the case may be, it is further provided that:
A. The management of the business and the conduct of the
affairs of the corporation shall be vested in its Board of
Directors. The number of directors which shall constitute the
whole Board of Directors shall be fixed exclusively by one or
more resolutions adopted by the Board of Directors.
B. The Board of Directors shall also have the power to adopt,
amend or repeal the Bylaws.
VI.
A director of the corporation shall not be personally liable to
the corporation or its stockholders for monetary damages for any
breach of fiduciary duty as a director, except for liability (i)
for any breach of the director?s duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a
knowing violation of law (iii) under Section 174 of the Delaware
General Corporation Law, or (iv) for any transaction from which
the director derived an improper personal benefit. If the
Delaware General Corporation Law is amended after approval by
the stockholders of this Article to authorize corporate action
further eliminating or limiting the personal liability of
directors, then the liability of a director shall be eliminated
or limited to the fullest extent permitted by the Delaware
General Corporation Law. No amendment, modification or repeal of
this Article VI shall adversely affect the rights and protection
afforded to a director of the corporation under this Article VI
for acts or omissions occurring prior to such amendment,
modification or repeal.
VII.
The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of
Incorporation, in the manner nor or hereafter prescribed by
statute, and all rights conferred upon the stockholders herein
are granted subject to this reservation.
[Signatures on Following Page]
IN WITNESS WHEREOF, this Certificate has been subscribed this
27th day of July, 2016 by the undersigned who affirms that the
statements made herein are true and correct.
SENSORY PERFORMANCE TECHNOLOGY, INC
By:
_________________________________________
Ben White
Chief Executive Officer
C.
PART II AND III
7
spt-partii2.txt
SPT PART II
Sensory Performance Technology, Inc
1,250,000 Shares of Common Stock
Minimum purchase: 40 Shares ($640.00)
We are offering a minimum of 625,000 shares
of common stock and a maximum of 1,250,000
shares of common stock on a ?best efforts?
basis. If $10,000,000 in subscriptions for
the shares (the ?Minimum Offering?) is not
deposited in escrow on or before December
31, 2016 (the ?Minimum Offering Period?),
all subscriptions will be refunded to
subscribers without deduction or interest.
Subscribers have no right to a return of
their funds during the Minimum Offering
Period. If this minimum offering amount has
been deposited by December 31, 2016, the
offering may continue until the earlier of
January 31, 2017 (which date may be extended
at our option) or the date when all shares
have been sold. We reserve the right to
accept subscriptions for up to an additional
312,500 shares, for an additional $5,000,000
in gross proceeds. See ?Plan of
Distribution? and ?Securities Being Offered?
for a description of our capital stock.
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.
There is currently no trading market for our
common stock. We intend to apply to have our
shares of common stock approved for trading
on the OTCQX marketplace and expect to trade
under the symbol ?SPTX? upon the completion
of this offering.
These are speculative securities. Investing
in our shares involves significant risks.
You should purchase these securities only if
you can afford a complete loss of your
investment. See ?Risk Factors? beginning on
page 4.
Number of Shares
Price to Public Underwriting discounts &
commissions (1)
Proceeds to issuer (2)
Per share: 1 $16.00 $0.00
$16.00
Total Minimum: 625,000 $10,000,000
$0.00 $10,000,000
Total Maximum: 1,250,000 $20,000,000
$0.00 $20,000,000
(1) We do not intend to use commissioned
sales agents or underwriters.
(2) Does not include expenses of the
offering, including costs of Investor Escrow
Setup, Technology and Accounting Fee and
posting offering information on
StartEngine.com, estimated to be $1,367,187
and $2,734,375 for the minimum and maximum
offering amounts, respectively. See ?Plan of
Distribution.?
The United States Securities and Exchange
Commission does not pass upon the merits of
or give its approval to 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.
We are providing the disclosure in the
format prescribed by Part II of Form 1-A.
26 East 12th Street, Linden, NJ 07036 P
(646) 539-8926; www.sensorypt.com/dec.html
The date of this Offering Circular is
September 15, 2016
TABLE OF CONTENTS
RISK FACTORS 4
USE OF PROCEEDS 7
BUSINESS 8
PROPERTIES 26
MANAGEMENT?S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
26
DIRECTORS, EXECUTIVE OFFICERS AND
SIGNIFICANT EMPLOYEES 27
COMPENSATION OF DIRECTORS AND EXECUTIVE
OFFICERS 29
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN
TRANSACTIONS 31
SECURITIES BEING OFFERED 32
PLAN OF DISTRIBUTION 35
FINANCIAL STATEMENTS 38
?
The following summary highlights selected
information contained in this offering
circular. This summary does not contain all
the information that may be important to
you. You should read the more detailed
information contained in this offering
circular, including, but not limited to, the
risk factors beginning on page 4.
References to ?we,? ?us,? ?our,? or the
?company? mean Sensory Performance
Technology.
Our Company
Sensory Performance Technology, Inc (or the
?Company?), is a research and development
tech company producing innovative and
patented wearable tech product solutions to
athletes, consumer, military, law
enforcement and medical industries
worldwide. Our flagship product, Eclipse?
Goggles, currently in high demand with some
of the most prominent names in professional
sports, is designed to improve sensory motor
reflexes and cognitive performance using
patented stroboscopic technology. In
addition to a vertical model of product
design, manufacturing and distribution, we
plan to create and distribute highly-
specialized content through our ?Online
Academy,? featuring instructional videos
from world-class training partners like
Accelerate Basketball, personal trainers to
National Basketball Association?s Most
Valuable Player of 2016 Steph Curry.
This Offering
Securities offered Minimum of 625,000
shares of common stock ($10,000,000)
Maximum of 1,250,000 shares of common stock
($20,000,000) We reserve the right to accept
subscriptions for up to an additional
312,500 shares for up to an additional
$5,000,000.
Common stock outstanding before the offering
(1)
3,875,000 shares
Common stock outstanding after the offering
(1)
2,575,000 shares
Use of proceeds The net proceeds of this
offering will be used to further develop,
market, distribute and oversee manufacturing
of the Eclipse googles, and develop products
and revenues using three additional
wearable-tech solutions leveraging other
intellectual property assets, and
instructional content for an online training
academy
Risk factors Investing in our shares
involves a high degree of risk. As an
investor you should be able to bear a
complete loss of your investment. You should
carefully consider the information set forth
in the ?Risk Factors? section of this
offering circular.
(1) Does not include any warrants to
purchase stock at a later date given to
StartEngine.com.
(2) Assumes the sale of 1,250,000 shares.
If we accept subscriptions for an additional
312,500 shares, the number of shares
outstanding after the offering will be
2,262,500.
RISK FACTORS
An investment in our shares involves a high
degree of risk and many uncertainties. You
should carefully consider the specific
factors listed below, together with the
cautionary statement that follows this
section and the other information included
in this offering circular, before purchasing
our shares in this offering. If one or more
of the possibilities described as risks
below actually occur, our operating results
and financial condition would likely suffer
and the trading price, if any, of our shares
could fall, causing you to lose some or all
of your investment. The following is a
description of what we consider the key
challenges and material risks to our
business and an investment in our
securities.
Risks Related to our Business and Industry
We have a limited operating history and have
not yet generated any revenues.
Our limited operating history makes
evaluating the business and future prospects
difficult, and may increase the risk of your
investment. Sensory Performance Technology,
Inc was formed in January 2016 and we have
not yet begun producing or delivering our
first product. To date, we have no revenues.
We intend in the longer term to derive
substantial revenues from the sales of
Eclipse Goggles. Eclipse Goggles are in
development, and we do not expect to start
delivering to customers until the fourth
quarter of 2016 at the earliest. Eclipse
Goggles require significant investment prior
to commercial introduction, and may never be
successfully developed or commercially
successful.
It is anticipated that we will experience
losses prior to the launch of the Eclipse
Goggles.
We have no revenues and expect significant
increases in costs and expenses before
realizing forecasted revenues in six months
at the earliest. Though we have successfully
developed a commercially-accepted prototype
of Eclipse Goggles, there can be no
assurance that we will be commercially
successful.
Terms of subsequent financings may adversely
impact your investment.
We may have to engage in common equity,
debt, or preferred stock financing in the
future. Your rights and the value of your
investment in the common stock could be
reduced. Interest on debt securities could
increase costs and negatively impacts
operating results. Preferred stock could be
issued in series from time to time with such
designation, rights, preferences, and
limitations as needed to raise capital. The
terms of preferred stock could be more
advantageous to those investors than to the
holders of common stock. In addition, if we
need to raise more equity capital from the
sale of common stock, institutional or other
investors may negotiate terms at least as,
and possibly more, favorable than the terms
of your investment. Shares of common stock
which we sell could be sold into any market
which develops, which could adversely affect
the market price.
We face significant barriers in our attempt
to achieve speed-to-market-advantage with
the Eclipse? Goggles, and if we cannot
successfully overcome those barriers the
business will be negatively impacted.
Though we have a full production intent
prototype for our consumer-level model, we
are relying on the manufacturing
capabilities of subcontracted manufacturing
partners based in China, Taiwan and other
offshore locations. The design, manufacture
and distribution of new consumer products
into the retail industry has traditionally
been characterized by significant barriers
to entry, including large capital
requirements, investment costs of designing
and manufacturing products, long lead times
to bring products to market from the concept
and design stage, the need for specialized
design and development expertise, insurance
requirements and establishing a brand name
and image. As a product developer of
wearable technology, we face a variety of
added challenges to entry that a traditional
sporting goods company would not encounter
including educating the consumer on the
advantage of this new technology and the
proper use of it in highly-specific training
regimens, and unproven high-volume customer
demand for our wearable technology. We must
successfully overcome these barriers to be
successful.
Our success is dependent upon consumers?
willingness to adopt wearable training
technology.
If we cannot develop sufficient market
demand for stroboscopic technology, we will
not be successful. Factors that may
influence the acceptance of wearable
training technology include:
? perceptions about stroboscopic goggles
quality, safety, design, performance and
cost;
? perceptions about the ease or
difficulty of wearable training technology
and the successful adoption of training
regimens needed to produce desired results
with consumers,
? the availability of alternative
wearable tech products utilizing similar
stroboscopic technology;
? the challenge of competitors entering
the marketplace with a consumer product
before we do.
Demand in the consumer sporting goods
industry is highly volatile.
Volatility of demand in the sporting goods
industry may materially and adversely affect
our business prospects, operating results
and financial condition. The markets in
which we will be competing have been subject
to considerable volatility in demand in
recent periods, with liquidations of
national chains redefining the industry.
After filing for bankruptcy on March 2,
2016, national sporting goods retailer
Sports Authority began the closing of 142
stores and two distribution centers in an
attempt to reorganize while looking for a
buyer. After conducting a sale process and
finding no suitable offers, Sports Authority
notified the court it would pursue a total
asset sale. Sports Authority?s closing
follows the announcement in mid-April that
going-out-of-business sales had begun at all
47 Sport Chalet stores in California,
Arizona and Nevada. Further industry
consolidation may be imminent. In December
2015, Cabela?s announced it had engaged
Guggenheim Securities LLC as its financial
advisor to explore strategic alternatives.
Our success is highly dependent on Ben
White, our founder and Chief Executive
Officer.
Ben White has been the driving force behind
the development of wearable training
technology and the company. The loss of his
services would have a material adverse
effect on our business. We have not obtained
any ?key man? insurance for Mr. White.
Risks Related to the Investment in our
Common Stock
The ownership of our preferred stock is
concentrated among existing executive
officers and directors.
Upon the sale of all of the shares offered
in this offering, our executive officers and
directors will continue to own beneficially,
in the aggregate, a vast majority of the
outstanding shares of preferred stock. As a
result, they will be able to exercise a
significant level of control over all
matters requiring shareholder approval,
including the election of directors,
amendments to our Articles of Incorporation,
and approval of significant corporate
transactions.
There currently is no public trading market
for our securities and an active market may
not develop or, if developed, be sustained.
If a public trading market does not develop,
you may not be able to sell any of your
securities.
There is currently no public trading market
for our common stock, and an active market
may not develop or be sustained. If an
active public trading market for our
securities does not develop or is not
sustained, it may be difficult or impossible
for you to resell your shares at any price.
Even if a public market does develop, the
market price could decline below the amount
you paid for your shares.
Our potential issuance of convertible notes
and warrants could substantially dilute the
interests of shareholders and depress the
market price for our common stock.
Though we have no debt at this time, the
possibility that we could be forced to
secure debt financing and/or issue
convertible notes and warrants exists.
Accordingly, these future issuances of
common stock could substantially dilute the
interests of our existing shareholders and
investors in this offering.
?
USE OF PROCEEDS
We estimate that, at a per share price of
$16.00, the net proceeds from the sale of
the 1,250,000 shares in this offering will
be approximately $17,265,250, after
deducting the estimated offering expenses of
approximately $2,734,750. If only the
minimum number of 625,000 shares is sold,
the net proceeds will be approximately
$8,632,625 after deducting estimated
offering expenses of $1,367,375.
The net proceeds of this offering will be
used primarily to fund the design,
development, prototyping, co-manufacturing,
marketing and distribution of our wearable
training technologies, beginning with our
flagship product, Eclipse Goggles, along
with the development and production of video
content for the online training academy.
This stage is anticipated to take four to
six months.
Accordingly, we expect to use the net
proceeds as follows:
Minimum Offering Maximum Offering
Product Development & COGS???????..
............................. Amount
$ 4,500,000 Percentage
52.1% Amount
$ 9,000,000 Percentage
52.1%
Professional Fees?????????????. 1,500,000
17.4% 3,000,000 17.4%
Marketing?..................................
......................... 1,500,000
17.4% 3,000,000 17.4%
Working capital (1)
.............................................
... 1,132,625 13.1% 2,265,250
13.1%
TOTAL
.............................................
............... $8,632,625 100.0%
$17,265,250 100.0%
(1) Working capital will be used for
salaries, prototyping and insurance,
equipment, travel, SGA and leases.
To the extent that we sell more than
1,250,000 shares, the additional net
proceeds will be used for working capital.
The foregoing information is an estimate
based on our current business plan. We may
find it necessary or advisable to re-
allocate portions of the net proceeds
reserved for one category to another, and we
will have broad discretion in doing so.
Pending these uses, we intend to invest the
net proceeds of this offering in short-term,
interest-bearing securities.
?
BUSINESS
Corporate Background and General Overview
Sensory Performance Technology, Inc. is
motivated by a mission to elevate the
performance of professional athletes,
military personnel, law enforcement officers
and medical professionals, corporate
executives and students worldwide through
the design, co-manufacture, and distribution
of groundbreaking patented wearable-tech
devices focused on challenging and training
the one aspect that controls the entire
body: the brain.
In a world where athletes tirelessly pursue
excellence, finding integrative ways to
advance their visual processing capabilities
has been a daunting problem. Intuitively,
they understand the eyes are the conduit to
the brain and physical motor reflexes depend
entirely on speed and span of recognition
(cognition). The Eclipse Goggles offer a
wearable technology solution to this
problem, increasing cognitive function in
the brain by simulating a stroboscopic
effect, thereby inducing visual stress
deprivation. After continuous exposure
through training, athletes learn how to
compensate for this sensory overload and
subsequently modify gaze behavior, making
visual information processing more
efficient.
About Eclipse Goggles
Eclipse Goggles are the latest phenomenon in
athletic sensory training. This technology
simulates a strobe light effect but in an
entirely different way. Unlike conventional
strobe lights, which emit bursts of flashing
lights (an invasive stimuli), Eclipse
Goggles do not emit any type of light
whatsoever. In fact, they produce a strobe-
like effect by momentarily blocking out
natural ambient light (a noninvasive
stimuli) in much the same way as blinking
does. By using LCD (Liquid Crystal Display)
lens technology, Eclipse Goggles have a
functionality of blocking ambient light by
electronically switching the lenses from
clear to opaque, much like shaded sun
glasses. There is no obtrusive light that
enters the eyes except natural daylight.
Eclipse Goggles are not unlike a flashing
image on a computer screen or video game in
terms of its potential risk of triggering
photosensitive epilepsy (seizures).
The next generation in elite athletic
training: Human sight and hearing are
profoundly diminished during intense
competitive action. As heartbeat and stress
levels increase, perceptions and fine motor
controls diminish. With a unique form of
training called ?temporal occlusion? these
effects can be overcome, and elite athletes
can train their visual and auditory
processing systems to improve performance.
Eclipse Goggles include visual-auditory
distraction control that provides the next
generation in elite athletic training.
Features and Options: Introducing the
Eclipse? dual-sensory stroboscopic glasses.
Since 2010, company Founder Ben White has
done pioneering work in stroboscopic vision
for elite performance training, designing a
next generation vision-training wearable
tech solution that can help any elite sports
trainer or aspiring athlete achieve their
mission. Featuring ruggedized construction
and dual-sensory technology, Eclipse Goggles
fit readily into any training regimen.
Checklist for a visual- auditory training
aid for elite athletes: Eclipse Goggles are
what?s needed in a next-generation product
to provide temporal occlusion for elite
sports performance training, incorporating
ideal features and characteristics:
? Lightweight and comfortable, only 2 oz.
net weight
? Ruggedized to withstand 40 C
temperatures and 7 g?s of force
? Hermetically sealed to resist moisture
and sweat
? Manufactured to quality standards AS
and ISO 9001
? Two-channel distraction control (visual
and auditory)
? Quickly and easily integrates with any
existing training protocols
? Effective inside or outdoors, day or
night, all-seasons and all-weather
? 2-way data streaming via Wi-Fi
? Auditory streaming via Bluetooth for
sound effects
? Multiple units controlled through
secure iPad app
? Individual units controlled through
secure iPhone/Android app
? Programmable for individual needs or
preferences
? Precise LCDs adjustable from 1 to 100
Hertz (flashes per second) at 1 Hertz
increments
? Built-in rechargeable lithium-ion
battery
? Completely wireless construction for
maximum convenience
? Sleep button for instant pause or
resumption of training
? Expandable for video logging, heart-
rate monitoring, and so on
? Backed by exceptional 5-year warranty
Visual Distraction - Sensory Tech Strobe
Features
? Visual distraction controlled by remote
control Bluetooth
? 10 levels of occlusion and single eye
strobe capabilities
? As much as 20 percent greater opacity
than the market has experienced
? Sweat resistant and anti-fog
Auditory Distraction - Sensory Tech Strobe
Features
? Auditory distraction controlled by
remote control Bluetooth
? Holophonic sound effects that immerse
the athletes in real life environments
? Endless custom auditory applications
(crowd noise, cheering/booing, etc)
Bluetooth Control Unit Features
? Apple and android remote control
platform downloadable apps
? Standard pre-sets and unlimited custom
programs
? Create an Athlete Profile for keeping a
progression log
? Data Retrieval: Ability to review past
workouts and email directly to athlete
The competitive edge: Elite athletic
trainers are seeking any edge that can
increase performance. One promising area is
vision training, where decades of research
confirm that visual performance can be
enhanced with appropriate training. The
human eyes and ears have phenomenal
capabilities. But these abilities are
profoundly diminished by the Body Alarm
Reaction or BAR (?fight or flight?)
triggered by intense competitive action.
Intended to filter out irrelevant stimuli
during threatening situations, this response
can actually distort perceptions and
diminish performance.
A new generation of rugged, flexible and
portable sensory occlusion training:
Fortunately, the effects of BAR can be
overcome by a unique form of training called
?temporal occlusion? that exercises the
visual-auditory systems and forces the brain
to fill in missing sensory details. This
approach is based on more than 60 years of
scientific research in elite sports,
military, and law enforcement performance.
This research has proven that many key
components of perception can be enhanced
through this type of training.
The next generation of sports training:
Sensory Performance Technology has been a
pioneer in the field of sensory occlusion
training and has created a next generation
training aid called Eclipse Goggles. These
stroboscopic glasses contain active LCD
lenses and audio earplugs that increase
visual and auditory stress during any
training. This extra stress forces trainees
to visualize events taking place, even when
these events are temporarily obscured by the
LCD shutters and distracting sound effects.
The technology has been packaged in a highly
portable, ruggedized set of eyewear that
meets all the rigors of elite athletic
training. This product easily integrates
into any training protocol. Using it is as
simple as putting on a pair of sunglasses
and picking a tune on an iPod. While
research into the benefits of this approach
are ongoing, it has been endorsed by several
college and professional teams in different
sports. Both initial research and anecdotal
evidence confirm that it gets results. This
new technology represents the kind of
breakthrough that elite athletic trainers
are always seeking.
The amazing human visual and auditory
systems: About 80% of what we perceive comes
through the eyes. A highly complex organ,
the human eye contains roughly 13.7 million
photoreceptors, enabling us to detect 10
million colors and 500 shades of gray.
Though the eye muscles are tiny, they are
mighty. Milligram for milligram, the eye
muscles are the strongest and fastest in the
body. In an average day, these muscles move
about 100,000 times to bring objects into
sharp focus. A person would have to walk 50
miles a day to give his leg muscles that
much exercise.
When we look into the distance, the earth?s
surface curves out of sight about 3.1 miles
away. Yet from an elevated position, the
human eye can detect a single candle burning
30 miles away. Vision is the most far-
reaching sense available to any athlete. If
the eyes are the pilots of our senses, the
ears are the co-pilots. The human auditory
system maintains a 360-degree surveillance
zone around the body, detecting sound
emerging from any direction. Packed into a
tiny space the size of a hazelnut, each ear
has enough electric circuits to provide
phone service for a good-sized city. Each
ear provides a remarkable array of audio
functions including a directional
microphone, audio amplifier, impedance
transformer, spectrum analyzer, and
automatic gain control system.
The brain merges our binocular vision and 3D
hearing into an overall ?map? of the
surrounding environment. The inner ear also
provides balance. Tiny hairs inside three
semicircular canals sense movement in three
dimensions (yaw, pitch, and roll) and send
continuous signals to the brain, which
adjusts certain muscles to maintain our
balance. The brain processes all our sensory
inputs, merging the binocular signals from
our eyes and the 3D signals from our ears
into an overall ?map? of the surrounding
environment.
Intense action distorts perceptions: Despite
the amazing capabilities of human vision and
hearing, these systems do not always perform
at optimum levels. In fact, as stress and
heart beat levels increase, perceptions tend
to deteriorate. The single biggest threat to
seeing and hearing during intense
competitive action is the ?fight or flight?
response, known to modern researchers as
Body Alarm Reaction (BAR). The effects of
BAR has been studied by leading authorities
such as Dave Grossman, former Lieutenant
Colonel in the Army Rangers, Loren
Christensen, former police officer and
author and Optometrist Edward C. Godnig.
Godnig calls BAR ?an inevitable series of
neural and biochemical reactions,? noting
that one profound effect is a mental and
visual shift from focusing on nearby objects
to the wider environment, also known as
?tunnel vision.? He says athletes
experiencing BAR can lose their ability to
separate figure from ground and even get
confused about where they are on the playing
field.
Table 1: Perceptual Distortions Due to
Fight-or-Flight Response
Percent of police officers who admitted to
each effect (N=141)
85% Diminished sound (auditory exclusion)
80% Tunnel vision
72% Heightened visual clarity
65% Slow-motion time
51% Memory loss for some of the event
47% Memory loss for some of the subject?s
actions
40% Dissociation (detachment)
26% Intrusive, distracting thoughts
22% Memory distortions
16% Intensified sounds
16% Fast-motion time
Source: David Grossman & Loren Christensen,
?On Combat: The Psychology and Physiology of
Deadly Conflict
in War and in Peace?
Table 1 lists the many perceptual
distortions that BAR can cause during an
intense encounter, as reported by actual
police officers surveyed. Note that 4 out of
5 police officers reported ?tunnel vision?
or the narrowing of their perceptual field
to a small cone perhaps 18 inches in
diameter. Ironically, this loss of
peripheral vision happens just when these
officers need to be most acutely aware of
their surroundings. Even more (85%)
experience auditory exclusion: The over-
stressed brain chooses to rely on vision
alone, deliberately ?tuning out? all the
information provided by the ears.
Fortunately, elite performers can train
their eyes, ears, and brain to work together
for optimum performance even under highly
stressful conditions. For example, ice
skaters and ballet dancers learn to control
their gaze while doing quick spins to avoid
getting dizzy during a performance. Any
other athlete can be trained to become more
aware of the perceptual effects from BAR and
how to minimize them. This conclusion has
been uncovered by decades of scientific
research.
The science behind ?temporal occlusion?
For more than 60 years, researchers have
worked to unlock the mysteries of the
senses? role in elite performance. More than
40 years ago, Jack A. Adams proposed that
effective learning depends on the formation
of perceptual-motor feedback loops, which he
called ?the perceptual trace.? Funded by
the National Science Foundation, researchers
at Saint Olaf College in Minnesota tested
his theory. They used strobe lights flashing
at 2, 4, 10, 15 and 20 times a second to
distract subjects from a task requiring
precise eye-hand coordination. Confirming
Adams, the more sensory feedback that
subjects received, the better they did. Even
more intriguing, performance improved at
faster strobe rates of 10, 15 and
20/seconds?but not at slower flashes at 2
and 5/ second. And the training worked best
at 15 flashes a second. The researchers
wondered, was this some kind of ?sweet
spot?? They suggested that for a perceptual
trace to form and performance to improve,
the kinesthetic feedback must be backed up
with reasonably precise visual information.
If that visual information was not precise?
because the flashes were too slow or fast?no
perceptual trace could be developed. This
discovery was certainly intriguing, but how
could it be applied to sports?
Some earlier research provided a clue.
Drawing on research dating from 1952,
scientists in 1964 advanced the theory that
the brain has a ?rhythmic scanning
mechanism? running at about 100
milliseconds. (This is very much like the
clock in every computer, which synchronizes
all the signals handled by the system to a
basic frequency.) If this was so,
researchers reasoned they could disrupt the
visual input for some interval up to 100
msec before any subjects ?start losing
temporal information at the neural level.?
Sure enough, experiments showed that
performance was significantly affected by
flicker-rate. Test results got worse from 0
to 9 flashes/second?the closest interval to
the brain?s hypothetical sampling rate?and
then improved again up to the fastest rate
they studied, 24/second. Many questions
remained: If the brain has a ?sampling rate?
of 10 Hertz, how would it cope with training
exercises done at faster or slower rates?
Could we actually train the brain to form a
perceptual trace faster? And would that
improve any related visual or auditory
skills? Researchers from the world of high-
performance sports were already looking for
those answers.
The precedents in elite sports performance:
A recent study at the University of Montreal
showed that professional athletes have an
extraordinary ability to learn complex and
dynamic visual scenes, far better than
amateur?s athletes or non-athletes. The
researchers concluded, ?these remarkable
mental processing and learning abilities
should be acknowledged as critical elements
for world-class performance in sport.? The
question is, how can elite trainers build on
these strengths to counter the effects of
BAR and develop true champions?
Past a certain threshold of sensory
distraction, trainees fill in any missing
details by instinct or experience. A recent
literature survey that compared elite
training methods for sports and military
touched on an intriguing technique that
provides a likely answer. First devised
during the 1960s, this is called ?temporal-
occlusion training.? It works by temporarily
blocking the view of the action, so the
trainee has to ?guess? what?s going to
happen. For example, in one study tennis
players watched film shot from the viewpoint
of a player on the court. Just as the
opposing player?s racket made contact with
the ball, the screen would go dark. The
player being trained had to decide where
their opponent?s shot was headed. With
training, the participants significantly
improved how quickly and accurately they
could predict the direction of an opponent?s
shot.
Further studies in temporal occlusion
followed, using various devices:
? Film of baseball pitches and special
helmets that blocked the hitter?s vision as
he stepped onto the plate (Burroughs, 1984)
? More filmed tennis shots (Williams et
al, 2002)
? Near-life-size video intended to train
outfielders to play goalkeeper (Williams,
Ward, and Chapman, 2003)
In all cases, the athletes who practiced
using temporal occlusion improved their
accuracy, reaction time, or both. Even
though some critical information was hidden
from them during practice exercises, they
still managed to acquire a perceptual trace
that generated effective recall?some form of
?muscle memory??even when the occlusion was
removed.
What can we make of these findings? It
seemed that past a certain threshold of
sensory distraction, trainees could fill in
missing details by instinct or experience;
in effect, they learned how to visualize an
unfolding event by drawing on their previous
knowledge. In any event, this approach to
training seemed to work. And it wasn?t long
before the biggest name in sports took
notice.
These research findings prompted the biggest
name in sports performance, Nike, to release
an experimental set of stroboscopic training
glasses in 2011. Called the Vapor Strobe
Eyewear, these featured curved LCD shutter
lenses, re-chargeable battery, and plastic
frames with an elastic strap. The product
was light enough to be used in any sport
from basketball to golf. The company claimed
the glasses helped athletes improve their
focus, reaction time, balance, and
peripheral vision. Anecdotal evidence on
the value of the glasses began to accumulate
from several winning sports teams:
? Oregon Ducks college football team
trained with pre-production glasses for
several successful seasons, then won the
Rose Bowl in 2012 and the Fiesta Bowl in
2013
? Green Bay Packers receiver Greg
Jennings reduced his incomplete passes from
8 per season to 3, saying the stroboscopic
glasses enabled him to ?see the ball a
little better and react quicker.?
? Florida Junior Blades hockey team
trained with the Nike glasses and racked up
an impressive record of 100 wins with only
19 losses and 5 ties, plus league records
for most goals scored, fewest goals against,
and most short-handed goals.
Academic research into the benefits of this
vision training continues, mainly at Duke
University. Researchers there gave hundreds
of participants?varsity players and non-
athletes alike?both lab and field exercises
wearing the Nike glasses, followed up by
computerized visual testing. ?Results
revealed that stroboscopic training led to
significantly greater re-test improvement in
central visual field motion sensitivity and
transient attention abilities,? say the
researchers from Duke. These benefits
appear to be ?relatively robust? since they
appeared after only two days of training,
affecting both varsity athletes and non-
athletes alike. ?Visual attention is a
critical ability for many domains, and even
a small increase can have profound effects,?
concluded the researchers. ?A small percent
improvement in motion perception and focused
attention may mean the world to an athlete
engaged in a competitive sport.?
Table 2 lists 12 discrete visual abilities,
and shows how these recent findings have
started to fill in the blanks where only
anecdotal evidence of the benefits of
stroboscopic training once existed.
Optometrist Godnig confirms that all these
visual skills?except for color vision?have a
?learned component? that ?can be trained to
improve.? And he says this is already
happening in the domain of sports, with
effective vision training now deployed by
many teams and campuses.
Table 2: Inventory of Visual Skills and
Training Results from Stroboscopic Glasses
That Provide Temporal Occlusion
Visual skill Definition Trainable
Evidence
Central awareness Maintaining awareness of
an object and the surrounding visual space
to avoid ?tunnel vision?
Yes
Confirmed by Duke University research
Color perception Ability to distinguish
different colors (frequencies of light)
No
Determined by genes, disease, or injury
Depth perception Judging the relative
distances between objects
Yes Often reported anecdotally, now under
formal research
Eye-focusing flexibility Adjusting focus on
objects at different distances
Yes Often reported anecdotally, now under
formal research
Eye motility Accurate eye tracking of a
moving object
Yes Confirmed by Duke University research
Eye-hand-body coordination Coordinated
activities such as aim and trigger control
Yes Often reported anecdotally, now under
formal research
Fixation ability (gaze control)
Maintaining the gaze on a single object
Yes Often reported anecdotally, now under
formal research
Peripheral vision
Maintaining awareness of peripheral events
Yes Often reported anecdotally, now under
formal research
Speed of recognition
Recognizing an object quickly
Yes Often reported anecdotally, now under
formal research
Visual acuity
(static and dynamic) Determining detail
in a stationary (static) or moving object
(dynamic)
Yes Often reported anecdotally, now under
formal research
Visual memory Embedding new skills to
become fast and automatic
Yes
Confirmed by Duke University research
Visualization
Using the ?mind?s eye? to anticipate where
a moving object is most likely located when
direct view is obscured
Yes Often reported anecdotally, now under
formal research, an ideal visual skill to
exercise with strobe glasses
Sources: Edward C. Godnig, Duke University,
MJ Impulse
Note: Formal research with MJ Impulse strobe
glasses is underway, but not yet published
How Strobe Glasses Work: Eyes are similar to
a pair of synchronized cameras that
constantly receive visual information. All
information entering the eyes is converted
into signals, which are sent to the brain
for processing. We perceive images in the
brain, not in the eyes. The brain gives
instructions back to the eyes and also to
other parts of the body as a response to the
information it receives. The entire process
is done at unimaginable speed, but still
takes time. How fast and accurately can it
be done? Well, that is what makes a dramatic
difference in elite performance.
Strobe Technology: Accurate Static Visual
Acuity (Static Vision) is a fundamental
requirement for becoming an outstanding
athlete. It is said the minimum vision
requirement is 20/20. If an athlete has less
acuity than 20/20, it is recommended that it
be corrected to 20/20 or better before
beginning Dynamic Vision training. Dynamic
Visual Acuity (Dynamic Vision) is the
capability of distinguishing object(s)
whether the object is in motion, the
observer is in motion or both. The concept
of Sports Visual Acuity (Sports Vision) is
broad; as it includes every aspect of our
visual capabilities and encompasses the
mental features used in performing athletic
activities.
Basic Theory: It has been known many years
that the strobe effect helps improve Dynamic
Vision. When you see a moving object under
the strobe light, you can distinguish the
object image only when the strobe light
flashes. This means the visual information
entering the eyes is limited. In other
words, a continuous moving image is sliced
into multiple images. The brain has to
compute the given information and create
images during the blackout period to
compensate for the situation; this is
referred to as visualization. Considering
the fact that we see things in the brain,
not in the eyes, such a process is possible,
especially when trained.
Advantage: By limiting the amount of
information an athlete has available during
training, you expedite the development of
skill and enhance performance at a far
greater rate than traditional methods. As we
know that gaze control is critical to elite
athletic performance, the Eclipse Goggles
improve the speed and span of recognition as
well as their ability to discriminate
between meaningful visual cues. Now athletes
have the ability to work on both the
physical and cognitive aspects of their game
anywhere, at any time.
Proof of Concept
The benefits of stroboscopic technology were
explored by NASA as early as 2006, when it
was demonstrated that stroboscopic goggles
that simulate a strobe-lighting effect could
prevent the nauseating effects of space
sickness - and that of more down-to-Earth
travel. Designed by Millard Reschke at JSC,
with George Ford and Jeffrey Somers at Wyle
Laboratories in Houston, the goggles were
honored at the Inventors' Luncheon 2006 at
NASA's Johnson Space Center in Houston,
Texas. Reschke came up with the idea for the
glasses after observing a particular
astronaut who had returned from a long stay
on Russia?s former space station, Mir. A
1981 study suggested that strobe lighting
might help with motion sickness, but it was
not clear why. Reschke?s team noticed that
the astronaut?s eyes darted back and forth
more than normal. The team suspected these
eye jitters ? known as square wave jerks ?
were helping to ?freeze? the moving visual
scene on his retina, protecting him from
space sickness. After Reschke observed a Mir
astronaut, he wondered whether strobe
lighting might also be freezing images on
the retina. So his team created glasses with
lenses made of LCD "shutters" that switch
from dark to clear very quickly, providing a
strobe effect. In a study published in
January 2006 through the National Institute
of Health , Reschke's team tested a pair of
the glasses. The LCD shutters allowed four
10-millisecond "flashes" of light to come
through each second. The subjects using the
glasses were able to endure simulated motion
sickness for the entire 30-minute duration
of the study - those without the goggles
lasted only 24 minutes on average.
Stroboscopic Research and Athletes: The
dynamic aspects of sports often place heavy
demands on visual processing. As such, an
important goal for sports training should be
to enhance visual abilities. Recent research
has suggested that training in a
stroboscopic environment, where visual
experiences alternate between visible
and obscured, may provide a means of
improving attentional and visual abilities
in athletes. The study explored whether
stroboscopic training could impact
anticipatory timing?the ability to predict
where a moving stimulus will be at a
specific point in time. Anticipatory timing
is a critical skill for both sports and non-
sports activities, and thus finding training
improvements could have broad impacts.
Participants completed a pre-training
assessment that used a Bassin Anticipation
Timer to measure their abilities to
accurately predict the timing of a moving
visual stimulus. Immediately after this
initial assessment, the participants
completed training trials, but in one of two
conditions. Those in the Control condition
proceeded as before with no change. Those in
the Strobe condition completed the training
trials while wearing specialized eyewear
that had lenses that alternated between
transparent and opaque (rate of 100ms
visible to 150ms opaque). Post- training
assessments were administered immediately
after training, 10-minutes after training,
and 10-days after training. Compared to the
Control group, the Strobe group was
significantly more accurate immediately
after training, was more likely to respond
early than to respond late immediately
after training and 10 minutes later, and was
more consistent in their timing estimates
immediately after training and 10 minutes
later.
Use of Stroboscopic Technology in Major
League Baseball: In the elite world of Major
League Baseball, teams who once shunned
prospects who wore glasses are now using
goggles to enhance player?s visual training
and cognitive reflexes. Teams across
baseball are working with companies like
Neuroscouting to introduce vision and
reaction-time to their evaluation and
training processes. ?Hitters have three
tenths of a second on a 90 mph pitch to make
a decision,? says Dr. Keith Smithson, the
Nationals? team optometrist and founding
shareholder in Sensory Performance
Technology, Inc. ?If we can buy a tenth in
there somewhere, we gain the ability to foul
it off if we were gonna miss it or put it in
play if we were gonna foul it off.?
Smithson uses a three-tiered approach to eye
care: He tests and corrects visual acuity
(the average major leaguer has 20?121?2
vision, and he?ll prescribe lenses for
anyone at or above 20?20); trains the seven
muscles around the eye to focus through
drills, both high and low tech; and tries to
improve visual processing, the communication
between the eyes and the brain. "It used to
be that we had the science but technology
hadn?t caught up,? says Smithson. ?Now we?re
starting to have the technology too.?
That?s one of the benefits of vision
training?unlike with a lifting program,
where an athlete might see a result only
after several weeks of training, the
difference can show up after 15 minutes of
ocular workouts, so it?s easy to get players
to buy in. As often as possible, Smithson
tries to incorporate vision training into
other exercises so it doesn?t even take up
extra time. Players wear strobe glasses that
blink cloudy and clear while sprinting or
catch Wiffle balls at random while doing
squats.
Use of Stroboscopic Technology in
Professional Hockey: Published research
proves that strobe glasses dramatically
improve the performance of professional
hockey players. Players who trained with
special eyewear that only allowed them to
see action intermittently showed significant
improvement in practice drills, according to
a Duke University study with the NHL's
Carolina Hurricanes. Earlier research using
the stroboscopic eyewear during training
showed improved vision, visual attention,
and ability to anticipate the timing of
moving items. But the small pilot study with
Hurricanes players is the first to directly
explore whether those effects can improve
sports performance. Players who trained with
the strobe eyewear experienced an 18 percent
performance improvement in a series of on-
ice skill tests. A control group showed no
change.
In a study conducted through Duke
University, Stephen R. Mitroff collaborated
with Hurricanes athletic trainers and
strength and condition coaches Peter Friesen
and Doug Bennett to test players during the
team's 16-day pre-season training camp.
Eleven players completed the full study
wearing eyewear called the Nike SPARQ Vapor
Strobe. The athletes were randomly divided
into a five-player control group that
completed normal training and a six- player
strobe group that wore the eyewear once
daily during normal training. Each group
completed a performance assessment before
and after training. Forwards were asked to
perform a task that involved difficult
skating before taking shots on goal, and
defensemen were asked to skate in a circle
before completing long passes. ?That 18-
percent improvement for on-ice skills for
professional players is huge," Mitroff said.
"This is a dramatic improvement observed in
professional athletes."
Stroboscopic Technology Enhances Visual
Memory in Athletes: Sports often rely on the
ability to keep fleeting information in
memory (e.g., a basketball player making a
no-look pass must remember the locations of
his teammates and opponents), and any boost
in visual memory abilities could manifest in
improved performance. Previous research has
shown that intermittent, or stroboscopic,
visual training (i.e., practicing while only
experiencing snapshots of vision) can
enhance visual-motor control and visual
cognition, yet many questions remain
unanswered about the mechanisms that are
altered. Another study used a partial-report
memory paradigm to assess the possible
changes in visual memory following training
under stroboscopic conditions, exploring
the impact of altering how visual
information is accumulated over time by
assessing how intermittent vision influences
memory retention. In comparison to the
control group, both stroboscopic groups
(immediate and delayed retest) revealed
enhanced retention of information in short-
term memory, leading to better recall at
longer stimulus-to-cue delays (640-2,560
ms). These results demonstrate that
training under stroboscopic conditions has
the capacity to enhance some aspects of
visual memory, that these faculties
generalize beyond the specific tasks that
were trained, and that trained improvements
can be maintained for at least a day
Conclusion: After under- going stroboscopic
training, participants revealed an improved
ability to retain visual information in
short- term memory. Furthermore, this
improved ability was still present 24 h
later. While this is only one specific means
by which visual processing can adapt, it
indicates that stroboscopic training can
lead to general improvements in higher-
level visual cognition. More broadly, this
result advances the scientific study of
perceptual processing by providing an
example of generalized learning. As well,
this result informs athletic training by
suggesting that stroboscopic experiences
might be able to improve performance through
benefits in visual memory.
Improved Visual Cognition through
Stroboscopic Training: Humans have a
remarkable capacity to learn and adapt, but
surprisingly little research has
demonstrated generalized learning in which
new skills and strategies can be used
?exibly across a range of tasks and
contexts. A study published in Frontiers of
Psychology examined whether generalized
learning could result from visual-motor
training under stroboscopic visual
conditions. Individuals were assigned to
either an experimental condition that
trained with stroboscopic eyewear or to a
control condition that underwent identical
training with non-stroboscopic eyewear. The
training consisted of multiple sessions of
athletic activities during which
participants performed simple drills such as
throwing and catching. To determine if
training led to generalized benefits,
computerized measures were used to assess
perceptual and cognitive abilities on a
variety of tasks before and after training.
Computer-based assessments included measures
of visual sensitivity (central and
peripheral motion coherence thresholds),
transient spatial attention (a useful field
of view - dual task paradigm), and sustained
attention (multiple-object tracking).
Results revealed that stroboscopic training
led to significantly greater re-test
improvement in central visual field motion
sensitivity and transient attention
abilities. No training benefits were
observed for peripheral motion sensitivity
or peripheral transient attention abilities,
nor were benefits seen for sustained
attention during multiple- object tracking.
These findings suggest that stroboscopic
training can effectively improve some, but
not all aspects of visual perception and
attention.
Sensory Training Technology Takes Hold in
the NFL: A Duke University study confirms
stroboscopic technology offers improved
vision for elite professional athletes and
NFL players are turning to sensory
performance training to improve their vision
in an effort to up their game performance.
Green Bay Packers wide receiver Greg
Jennings has used that technology, boosted
by the use of the Nike Vapor Strobe eyewear
that features liquid-crystal display lenses
that cloud a player?s vision in 100-
millisecond patterns, forcing athletes to
more intensely focus on the main task at
hand: spying the quarterback, finding the
hole, spotting the open receiver or, in
Jennings? case, simply catching the ball.
?Your eyes are open to a level you are not
going to have them open to,? Jennings says.
?You are in tune to everything around you.?
Jennings says he didn?t need a study to know
his focus has increased on the field,
especially in difficult lighting situations.
?You wear those strobes and it gives you
that contrast and you see the ball a little
better,? he says. To get that extra focus in
games, practice offers a new wrinkle.
Jennings says one of his favorite drills is
to get ?like a bull in a ring and stand in
the middle? and have people around him
yelling ?ball? and firing a football or
tennis ball to him. With the strobes pumped
high, he must tune in, focusing on the ball.
And only the ball.
The Market
According to the latest report by the
National Sporting Goods Association,
consumer purchases of athletic and sports
equipment accounted for over $63 billion in
annual sales in 2014. Sensory Performance
Technology?s Eclipse? Stroboscopic Goggles
are superbly unique in that it crosses into
all sports categories, placing it right in
the center of this multi-billion dollar
athletic industry.
Market Analysis: Consumer sales of sporting
goods in the United States amounted to over
$63 BILLION in 2015. Athletic and sports
footwear made-up about $21 Billion. Of the
brands sold about 25% were purchased in
sporting goods stores, making these stores
the most popular channel for the
distribution of sports equipment in the
United States. In the same year, sporting
goods store sales amounted to around $44
billion, the highest amount to-date and an
increase of $10 billion from 2006. During
the first two months of 2016, retail sales
at U.S. sporting goods stores rose 9 percent
over the same period in the previous year.
Sporting goods stores? revenue is
anticipated to grow at a rate of 2.9 percent
in 2016. Based on retail sales, the leading
U.S. sporting goods store chain is Dick?s
Sporting Goods, which generated sales of
over $6.2 billion. As of 2014, there are
over 620 Dick?s Sporting Goods stores across
the United States and the Pennsylvania-based
company announced gross profit of almost 2
billion U.S. dollars for the year. The
biggest sporting goods retailer in terms of
revenue, however, is Walmart, with 9.3
billion U.S. dollars in revenue from
sporting goods sales in 2013. In 2015, about
15% of all sporting goods are sold online
with an estimated 200 million U.S. citizens
shopping through mobile Internet and social
media networks reported iHumanMedia.com. The
sporting goods industry profit margins
generally run about 35% per item. Nike and
Adidas are also the market leaders amongst
sporting goods manufacturers with about 27.8
and 20 billion U.S. dollars in worldwide
revenue respectively. Other major sporting
goods manufacturers with at least 1.5
billion U.S. dollars in revenue are VF
Corp., Puma, Asics, Jarden, New Balance,
Quicksilver, Mizuno, Amer Sports and
Columbia Sportswear.
Changing Tastes and Seasonality Impact
Recoveries: The popularity of various sports
has changed in the last decade; running, gym
workouts and target shooting have increased
in popularity, while golf, in-line skating,
skateboarding, and cross-country skiing have
decreased according to a recent survey
conducted by the National Sporting Goods
Association (NSGA) . Participation in tackle
football among children has also fallen, as
safety concerns have been publicized. Among
teenagers, participation has dropped in most
activities over the past decade, with the
exception of aerobics, archery, walking,
equipment-based exercising, ice hockey and
kayaking. Additionally, women?s
participation in sports is driving much of
the growth in popular sports. As consumers?
tastes for sporting activities change,
expect a corresponding change in demand for
the associated equipment and gear. The
performance of national sports teams can
also have a significant effect on retail
sales in localized geographies. Double digit
regional sales increases can be seen
following national sporting events such as
the Superbowl and The World Series. This
coupled with the seasonality of various
sports are primary drivers of gross recovery
values for sporting goods. Retailers
stocking wide assortments of seasonal gear
must carefully manage inventory levels to
sales volumes to maximize value.
Facts and statistics on Wearable Technology:
The wearable tech industry will treble
inside the next five years ? with a whopping
245 million devices expected to ship in
2019. That?s according to CCS Insight?s
Wearables Forecast, Worldwide, 2015-2019 ,
which states that the shipments for 2015
will be around 84 million units. That?s a
growth in monetary value of 64 percent; from
$15 billion in 2015 to $25 billion in
2019.The global wearables market is expected
to reach a value of 19 billion U.S. dollars
in 2018, more than ten times its value five
years prior. With all signs pointing to
wearable technology as the next big thing,
businesses need to have a game plan in place
to act on the competitive opportunity, while
taking note of the challenges, which include
consumers? apprehensions about security and
privacy. Still, 2014 was hailed by many tech
publications and experts as the ?Year of the
Wearable,? thus reflecting an explosion of
new wearable products, giant electronic
companies competing neck to neck with young,
crowd-funded startups and a very quick
market growth compared to previous years.
Businesses, military forces and medical
professionals have been using wearable
technology for decades, but the private
consumer market has only recently started to
feature items such as smart glasses, smart
watches, hearables, fitness and health
trackers or even smart jewelry and smart
fashion. Twenty percent of American adults
already own a wearable device and the
adoption rate ? on par with tablets in 2012
? is quickly expected to rise, according to
PwC?s Consumer Intelligence Series ? The
Wearable Future report ? an extensive U.S.
research project that surveyed 1,000
consumers, wearable technology influencers
and business executives, as well as
monitored social media chatter, to explore
the technology?s impact on society and
business. 53 percent of millennials and 54
percent of early adopters say they are
excited about the future of wearable tech.
Among the top three potential benefits were
(1) improved safety: Ninety percent of
consumers expressed that the ability for
parents to keep children safe via wearable
technology is important. (2) Healthier
living: More than 80 percent of consumers
listed eating healthier, exercising smarter
and accessing more convenient medical care
as important benefits of wearable
technology. (3) Simplicity & ease of use:
Eighty-three of respondents cited
simplification and improved ease of
technology as a key benefit of wearable
technology.
Cost Analyses. Subject to further
determination based on strategic partnership
analysis, we are anticipating co-launching
two models of the Eclipse Goggles for the
consumer retail sporting goods market, a
basic model for the entry-level athlete
priced at $400 MSRP and a higher-end model
with more robust features for the serious
athlete priced at $500 MSRP. Our market
research with target end-users has
demonstrated that our forecasted retail
price is acceptable and reasonable in
comparison to popular ?performance
enhancing? sporting goods products in demand
by juvenile and adult consumers active in
both recreational and aspiring professional
sports across all disciplines, including
baseball bats at $399 , basketball shot
trainers at $349.99 , and football accuracy
training devices at $499.99
Market testing. Since 2014, we have been
beta-testing prototypes of Eclipse Googles
with elite professional athletes through
their training partners, including
Accelerate Basketball, with whom we?ve
executed a strategic partnership. Accelerate
Basketball is quickly becoming one of the
most detail oriented, skill development
facilities in the country. With over 40
clients from different teams within the NBA,
including Steph Curry of the Golden State
Warriors, Founder Brandon Payne is being
recognized as a trainer who takes good
players to elite levels. Implementing
different tactics and detailed skill
development protocols. The term
neuromuscular efficiency, which he uses
often, entails taking players outside of
their comfort zone and overloading their
system in order to improve play during
extreme pressure situations. Brandon and his
staff have partnered with Sensory
Performance Technology to not only expedite
the development of the most elite players
but to make such an effective form of
training the norm throughout the entire
basketball world. The Eclipse Goggles have
been extraordinarily well-received with
unsolicited testimonials citing their
effectiveness in enhancing athletic
performance by some of the worlds? most
celebrated professional athletes, featured
in some of the most reputable print and
television media outlets in the world.
Market traction: Perhaps the greatest
testimonial to the effectiveness of
stroboscopic goggles comes from National
Basketball Association?s Most Valuable
Player of 2016 Stephen Curry, who has been
training with the goggles through our
strategic partners Accelerate Basketball.
Interviewed in GQ Magazine in November of
2015 , Mr. Curry was quoted as crediting his
trainers at Accelerate Basketball for
?squeezing the extra juice out of his
natural skill set,? through tailor-made
techniques ?to shock your body, sensory
things?like, goggles that flash in your face
and obstruct your vision while you try to
make accurate passes.? A video by CSN Bay
Area of Mr. Curry using the Eclipse Goggles
was reported on by Business Insider
November 2015 and was distributed on news
sites across the web, potentially seen by
millions. In the accompanying article,
reporter Scott Davis credits ?Stephen
Curry's ridiculous ball-handling,? and his
?well known?insane shooting ability,? to his
custom workouts with the Eclipse Goggles
viewed in the video, where ?Curry is wearing
what appear to be vision-reducing goggles
(though that is simply a guess) while
dribbling a basketball and tossing a tennis
ball back and forth with a trainer.? The
video by CSN Bay Area of Mr. Curry working
out with the Eclipse Goggles was reported on
by Next Impulse Sports , and on Bleacher
Report , (with 287,000+ reads) where ?the
Warriors phenom showed off his ridiculous
skill during practice, catching a small ball
with one hand while dribbling a basketball
in the other and wearing goggles that
increase difficulty.? The video also made
its way to the popular Huffington Post ,
where Sports Editor Justin Block credited
Mr. Curry?s MVP-level plays to practice with
an ?entire arsenal of impossible-to-do
dribbling drills? adding a tennis ball and
some weird glasses (Eclipse Goggles) to the
mix. Research shows that women?s
participation in sports is driving much of
the growth in the sporting goods consumer
marketplace and the use in training of the
Eclipse Goggles by notable professional
woman athlete and former Olympian Cassidie
Cierra Burdick, basketball player for
Atlanta Dream of the Women's National
Basketball Association (WNBA), can be seen
on Accelerate Basketball?s Instagram page.
Unsolicited testimonials for the
effectiveness of the Eclipse Goggles
transcends Major League Basketball,
extending into the National Football League
(NFL). On November 11, 2015, Timothy Wright,
a tight end for the Detroit Lions, who has
also played for the New England Patriots,
where he won a Superbowl ring for his
contribution to the New England Patriots
victory in Super Bowl XLIX, February 2015
over the Seattle Seahawks, tweeted an unpaid
endorsement while wearing the Eclipse
Googles, crediting Sensory Performance
Technology and company President Oliver
Marmol for creating the future of sports
with the following: ?Wearing the Eclipse
Strobe Glasses. Big Respect to @OliMarmol
and @SensorySports for designing the
Future.?
Technological Advantage: The Eclipse Goggles
were featured in a story in ESPN The
Magazine's ?Ideas of the Year Issue -- a
look at the people, moves and moments that
changed sports in 2015.? When asked in an
interview by reporter Sam Alipour what
?enabled you to elevate your game to another
level?? Mr. Curry cited strobe goggles as a
significant factor in his success with the
following quote: ?The drills I do are pretty
much what I've been working on these past
three or four years: like this drill where I
wear goggles with flashing lights that
obstruct my vision (while dribbling and
passing). Weird, random stuff. Those kinds
of sensory distractions are variables that
take my mind off the ball and sharpen the
brain, helping me neurologically. All of
that stuff helps me slow the game down.? The
National Monitor did a more in-depth story
on the advantages of technology, including
strobe goggles, giving advantages to teams
like the Golden State Warriors, for whom Mr.
Curry plays. According to the report, the
Golden State Warriors, who last season won
the NBA Championship following a record-
making season, are among the league?s
leaders in adopting wearable technologies,
citing a story from the San Jose Mercury
News. The team makes wide use of a variety
of devices to track the health of their
players, based on their experience that such
tracking enables them to stay healthy and
avoid injuries. Mr. Curry practices his
ball-handling skills while wearing strobe
glasses (Eclipse Goggles) that cut his
peripheral vision, helping him improve his
reaction time and visual awareness. Indeed,
Eclipse Goggles appear to be the wearable-
technology training device of choice for Mr.
Curry, as reported in a story by Digital
Trends in November 2015 . For the Golden
State Warriors, the adaptation of wearable
technology may help to reduce the downtime
of players while making their time more
effective on and off the court. ?Some
players bring their own devices to practice.
Star point guard Stephen Curry was spotted
at practice wearing a pair of strobe glasses
(Eclipse Goggles) designed to enhance
reaction time and visual awareness.?
Target markets: Through strategic
partnerships, we will be co-distributing our
patented stroboscopic technology to
consumers across the world, selling
initially into the North American retailing
sporting goods market, which is highly
competitive, targeting national sporting
goods chains, both brick-and-mortar and
online retail portals. We have conducted
various market analyses with regard to our
wearable training technology sales
forecasts, including cost analyses, consumer
profile, and cost comparisons to existing
wearable technology devices in the market,
market testing with high-profile celebrity
athletes and their trainers, and target
consumer markets.
Consumer Profile: Our target consumer is the
recreational and aspiring professional
athlete across all sports disciplines, with
a focus on the domestic U.S. Market.
According to Youth Sports Statistics, there
are 36,000,000 children aged 5-18 who play
organized sports each year; 66% of boys in
that age group play organized sports in or
out of school, and 52% of girls. Eighty-five
percent of those 36 million children
participating in organized sports are being
coached by their fathers. An additional 15
million adults played organized sports in
the U.S. in 2014, with 5.2 million golfers,
3.6 million playing basketball, 1.3 million
tennis players, 1.1 million soccer players,
226,000 football players, and 12,000
softball players.
Sales and Service Model
Sales Model. The initial sales model of our
patented strobe training technology is based
on the distribution of the product through
national brick-and-mortar sporting goods and
general merchandise retailers, as well as
online retailing portals like Amazon, and
our website through our training academy.
Early market testing has demonstrated
acceptance and demand across broad consumer
demographics including age, gender, and
sport. Preliminary work with National Hockey
League (NHL) and the World Soccer
Association (FIFA) demonstrates a strong
global market opportunity for our wearable
technology, of exponentially greater value
than the American consumer retail
marketplace alone.
Market forecasts for our patented wearable
training technology are conservative and are
based on a percentage of penetration of
major national retailers in the United
States. Subject to change, selling two SKUS
priced at $400 and $500 MSRP, the revenue
model is built on the expectation of
delivering a case of 12 of each SKU to major
national sporting goods retailers every
month, for a total of 288 units being
shipped to each store per year, for
anticipated wholesale revenues of $64,800
per year per door, capturing just over
300,000 users in a 24 month period after
introduction, or .006% of the total market
of 52 million recreational adult and child
athletes in the U.S. The number of potential
athletes and sports participants across all
disciplines nationally and internationally,
as well as military, law enforcement,
medical, corporate executives and academia
markets, exponentially scales our
conservative forecasts. Our forecasted exit
of $3.3 billion in year 5 using an EBITDA
multiple of 5, with a plan to sell the
product technology and brand to a major
sporting goods brands like Under Armour,
does not take into account the development
of revenue generated from video content
developed for our Online Training Academy
with our Strategic Partners, Accelerate
Basketball, or the development of additional
products and revenues for the military,
medical, law enforcement and industrial
markets leveraging our other wearable tech
patents.
TOTAL POTENTIAL MARKET OF MAJOR SPORTING
GOODS RETAILERS ONLY
Annual Units Store Wholesale
Sales
Retailers-Mid Tier # of Stores 288 $
450.00
Walmart 6629 1,909,152
$ 859,118,400
Dicks Sporting Goods 695
200,160 $ 90,072,000
Best Buy 1445 416,160
$ 187,272,000
Game Stop 2400 691,200
$ 311,040,000
Foot Locker 2369
682,272 $ 307,022,400
Champs 547 157,536
$ 70,891,200
The Sports Authority 470
135,360 $ 60,912,000
Academy Sports 190
54,720 $ 24,624,000
Gander Mountain 154
44,352 $ 19,958,400
REI 138 39,744
$ 17,884,800
Cabelas 64 18,432
$ 8,294,400
Totals 15,101 4,290,912 $
1,930,910,400
Distribution: We are currently vetting
manufacturing, sales, and marketing
strategic partners who already have
placement of successful products in our
target retailers. It is our plan to contract
with an experienced third party to oversee
all operations, sales and distribution of
our wearable training technology to the
retail consumer marketplace, in order for
the Company to focus on developing
additional wearable tech solutions based on
our patented stroboscopic technology for
both military, medical, law enforcement and
academia markets. With a goal to achieve
speed-to-market advantage in this sector, we
have entered into a preliminary Operating
Agreement as a first step towards securing
this working relationship. We will be
supporting our strategic partners with a
robust commitment to national advertising,
in-store point of purchase display
marketing, and supporting training video
content on our online Academy, featuring
instructional videos from notable sports
training authorities and potentially
celebrity athlete endorsements.
Wholesale Revenue SKU Breakdown
Year Total Potential Retailers Store
Penetration Number of Doors Total
Units Shipped Gross Sales Revenues
Year 1 15,101 5% 755 217,454
$48,927,240
Year 2 20% 3,020 869,818
$195,708,960
Year 3 50% 7,551 2,174,544
$489,272,400
Year 4 70% 10,571 3,044,362
$684,981,360
Year 5** 80% 12,081 3,479,270
$782,835,840
*Forecasts do not account for expansion of
SKU's from limited introduction, nor do they
account for additional revenue derived from
our online training academy. Potential
retailers represent major market sporting
goods retailers only and revenues do not
account for direct-to-consumer sales from
our website.
**2020 represents modest penetration of
international retailers (Australia, UK,
Brazil, etc)
Production Plan
All product development, prototyping,
manufacturing and quality control will be
managed through a strategic partnership with
an experienced high-profile technology
development company based in Silicon Valley,
with manufacturing facilities based in
Taiwan.
Manufacturing Facility. We do not own any
manufacturing facilities nor do we plan on
purchasing any equipment or leasing any
manufacturing facilities. We do not foresee
any outlies in capital expenditures in the
next five years for this purpose. We will be
subcontracting or licensing the
manufacturing, quality control and
distribution of our consumer wearable tech
product to strategic partners with valuable
relationships with offshore manufacturers of
high-end consumer electronics, designed to
our exacting specifications.
Sourcing. Sourcing of the components of our
wearable training technology will be managed
by subcontracted, design partners based in
Silicon Valley, with rigorous oversight for
quality control and reliability by company
Founder and Chief Technical Officer/CEO Ben
White.
Production Plan. Management is committed to
making Eclipse Goggles available to the
public as soon as six months after the
successful raising of capital through this
offering. We have been seriously engaged for
the last twelve months with the development
of consumer-ready prototypes, while vetting
subcontracted manufacturing partners
specializing in high-end wearable
technology, visiting their facilities both
domestically in California and offshore in
Taiwan, and securing detailed production
quotes based on the articulation of our
exact design specifications, while
simultaneously putting in place rigorous
quality control standards. We are currently
in discussion with potential strategic
partners who are currently manufacturing and
distributing a popular consumer sporting
goods product through targeted retail chains
like Dick?s Sporting Goods, to oversee our
proposed manufacturing in Taiwan, including
quality control, while also handling sales
and distribution including customs, duty and
brokerage through management of the supply
chain.
Intellectual Property
Patents. Sensory Performance Technology?s
Founder/CEO/CTO Ben White has applied for
and been granted the following patents for
Eclipse Goggles through the United States
Patent and Trademark Office
? Dual?Sensory Eyewear Device: Utility
Patent Application Number 14/974,317, Dated
18?DEC?2015
? Integrated Stroboscopic Eyewear For
Sensory Training: Provisional Patent
Application Number 62221600, Dated 21-SEP-
2015
Further, management believes they have
secured competitive advantage over and above
their patents in the following important
ways:
? We have demonstrated that we are
several years ahead of the developing
competition in terms of our technology,
market acceptance, full-featured design and
manufacturing and distribution schedule.
? Further, we have established a network
of elite celebrity athlete relationships
across all sports disciplines through
strategic partnerships with their athletic
trainers that is rarely seen among other
startups.
? We believe we have already created
significant brand awareness and priceless
equity through the unsolicited testimonials
of the effectiveness of the Eclipse Goggles
by noted celebrity athletes published widely
in notable and prestigious media outlets
including ESPN, GQ, Business Insider, Time
Magazine, the Huffington Post, to name a
few.
Trademark and Trade Name. We have registered
the following with the United States Patent
and Trademark Office:
? ?SENSORY TECHNOLOGY? (the logo and the
name SENSORY TECHNOLOGY in stylized text) ?
Registered May 17, 2016, registration number
4,958,834.
? ?The New PED Performance Enhancement
Device? (name only) ? Registered September
16, 2014, registration number 4,605,111
?
Competition
In 2009, Nike introduced the Sensory branch
of Sparq Training to the market. Nike Sparq
Sensory Training consisted primarily of two
products; the first being a large stationary
testing station which retailed at $80k and
the second being a pair of Vapor Strobe
Glasses that retailed at $300. The market
quickly saw the value in training with
strobe glasses as they were introduced to
the scientific research. The effectiveness
of this style of training became very
apparent however there was a lack of
enthusiasm and a limited market for an $80k
testing system. Nike unveiled their strobes
through a soft launch exposing some of their
endorsed athletes to their product. This
specific model of strobe glasses were unable
to withstand the rigors of sport and had
some technical shortcomings, namely they
were extremely fragile and would often
short-circuit when athletes would perspire.
Nike's strobe glasses were aesthetically
marketable but lacked durability. This has
resulted in the dismantling of the Sensory
Department within Nike. Since then, several
members of the former Nike team have come
together to create a new team separate from
Nike. This new partnership is known as
Senaptec. Our attorneys served Senaptec with
a Cease & Desist order in the first quarter
of 2016 after we were notified they were
using images of NBA MVP Steph Curry training
with our glasses. Senaptec?s attorneys
admitted wrongdoing and immediately removed
images of our goggles on their website and
collateral.
Our competitive advantage: Our company
shareholders include key personnel like Dr.
Keith Smithson, top sports optometrist in
the country if not the world, who works one-
on-one with premiere athletes in all
disciplines across the U.S. In addition the
company President and founding partner
Oliver Marmol, is a former MLB baseball
player and is currently the youngest Manager
in history to manage a minor league baseball
team for the St. Louis Cardinals. Mr. Marmol
has been introducing the Eclipse Goggles to
professional athletes and training them in
the benefits of stroboscopic technology for
the last year with remarkable and
demonstrable success. Understanding that
adoption of our technology by celebrity
athletes earns our priceless market traction
and invaluable publicity, we have entered
into a strategic partnership with Accelerate
Basketball, the leading training facility in
the U.S. for aspiring as well as
accomplished professional athletes. As a
result of our team, we work directly with
athletes.
We expect competition in our industry to
intensify in the future in light of
increased demand for wearable technology,
continuing globalization and consolidation
in the worldwide sporting goods industry.
Factors affecting competition include
product quality and features, innovation and
development time, pricing, reliability, and
perceived safety. Increased competition may
lead to lower unit sales and increased
inventory, which may result in a further
downward price pressure and adversely affect
our business, financial condition, operating
results and prospects. Our ability to
successfully compete in our industry will be
fundamental to our future success in
existing and new markets and our market
share. There can be no assurances that we
will be able to compete successfully in our
markets. If our competitors introduce new
stroboscopic goggles that compete with or
surpass the quality, price or performance of
our technology, we may be unable to satisfy
existing customers or attract new customers
at the prices and levels that would allow us
to generate attractive rates of return on
our investment. Increased competition could
result in price reductions and revenue
shortfalls, loss of customers and loss of
market share, which could harm our business,
prospects, financial condition and operating
results.
Research and Development
The cost of research and development is
estimated to be $1,600,000 accrued over the
last seven years, prior to the forming of
Sensory Performance Technology, Inc., and
has been significantly borne by Ben White,
company Founder and CEO. Mr. White has
assigned the intellectual property rights to
the Company for the use of his patented
technology in the development of our
wearable training solutions.
Employees
As of June 15, 2016, we have no full-time
and no part-time employees. All of the work
currently being conducted on behalf of
Sensory Performance Technology, Inc is being
done by its founding shareholder partners in
the form of sweat equity. All other work
related to the formulation of our
corporation, including financial
forecasting, marketing development and legal
responsibilities has been provided by
current shareholders in the company in the
capacity of independent contractors.
Legal Proceedings
There are no legal proceedings material to
our business or financial condition pending
and, to the best of our knowledge, there are
no such legal proceedings contemplated or
threatened.
PROPERTIES
Our principal office is located at 26 East
12th Street, Linden, NJ 07036, which is the
personal residence of company Founder and
CEO Ben White. It is our plan to secure
company offices with the funds gained from
this Offering.
MANAGEMENT?S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
Since our incorporation in January 2016, we
have been engaged primarily in developing
the design of the consumer model of the
Eclipse Goggles and developing strategic
partnerships to bring them to market. We
have also focused on introducing them to
celebrity athletes through their trainers to
validate our concept and advance brand
equity, achieving major successes in a
relatively short period of time. We are
considered to be a startup company, since we
are devoting substantially all of our
efforts to establishing our business and
planned principal operations have not
commenced. We completed the initial design
of the Eclipse Goggles in 2014, producing a
limited number of expensive prototypes,
which we have been distributing to celebrity
professional athletes in basketball,
baseball, football and soccer through their
trainers for use on a temporary basis. We
have aggressively been vetting sourcing,
manufacturing and marketing partners with
demonstrated experience in the consumer
sporting goods marketplace and are in the
preliminary agreement phase at this time.
Operating Results
We have not yet generated any revenues and
do not anticipate doing so until fourth
quarter 2016 at the earliest.
Operating expenses for the six months ended
July 30, 2016 have been borne entirely out-
of-pocket by the current shareholders in
exchange for shareholder interest in the
company.
Liquidity and Capital Resources
As of July 20, 2016 we had cash on hand of
$10,000 with no current working capital
deficit. There are no outstanding notes,
loans, warrants, or liens or liabilities of
any kind on any assets of the company.
Plan of Operations
Much of the prototyping of our consumer
model of Eclipse Goggles has been completed,
and we are finalizing our production and
quality control strategic partnerships with
manufactures based in Taiwan and Silicon
Valley, CA., which supports our milestone of
retail availability of our product 4th
quarter 2016. To date, approximately $1.6
million has been invested in research and
development and the production of prototypes
by company Founder Ben White. We are now
seeking $10 million in funding from this
Regulation A offering to fund the
production, marketing and distribution costs
of our consumer model and the online
training academy platform to support their
successful introduction into the
marketplace. We do not anticipate raising
additional funds in the next 12 months.
DIRECTORS, EXECUTIVE OFFICERS AND
SIGNIFICANT EMPLOYEES
Our directors, executive officers and
significant employees, and their ages as of
July 15, 2016 are as follows:
Name Position Age Term of Office
Executive Officers: Ben White
Chairman and Chief Executive Officer
53
January 2016
Oliver Marmol Chief Operating Officer 29
January 2016
Kim Lavine Chief Financial Officer
January 2016
All of our executive officers and
significant employees work full-time for us.
There are no family relationships between
any director, executive officer or
significant employee. During the past five
years, none of the persons identified above
has been involved in any bankruptcy or
insolvency proceeding or convicted in a
criminal proceeding, excluding traffic
violations and other minor offenses.
Executive Officers
Ben White ? CEO, CTO: Mr. White is the
Founder and Chief Executive Officer of
Sensory Performance Technology Inc. He holds
a Bachelor's Degree in Metaphysical Science
and leads the companies Research and
Development team which includes industry
experts and University partners. His
professional career in Neuro/Biofeedback
technology and its applications in peak
performance training began in the late 90?s
and by 2002; he received board accreditation
from The National Registry of Neurofeedback
Providers as a Certified Neurofeedback
Associate. In 2004, The Institute of Neuro
Learning designated Mr. White as Master
Sensory Integration Specialist and in that
same year he was selected as a finalist in
the Charles B. Benenson Entrepreneur of the
Year Award, presented by Project Enterprise.
Oliver Marmol ? President: Mr. Marmol was
originally drafted by the St. Louis
Cardinals from the College of Charleston. He
was a 6th Round pick for the Cardinals in
the 2007 MLB draft as a shortstop. In 2010
he was brought on staff to finish the season
as a hitting coach. In 2012 he was named the
youngest manger in all of Professional
Baseball. A short year later Marmol lead his
team, the State College Spikes, to a
Division Championship. Later that year
Marmol was named the 2013 winner of the
George Kissell Award. This prestigious award
has been presented annually since 1995 to a
member of the St. Louis Cardinals Minor
League staff who exhibits excellence in
player development.
Kim Lavine ? CFO: Identified as America?s
expert on inspirational business advice,
critically-acclaimed bestselling author Kim
Lavine has transformed the lives of millions
through her appearances on the Today Show,
Rachel Ray, Good Morning America, NBC & ABC
news, CNN, CNBC, FOX, NPR, Oprah & Friends
Radio Network, and features in USA Today,
Country Living, Guideposts, Inc, Business
Week, Entrepreneur, Women's World, and
Forbes, to name a few. Her startup bible
MOMMY MILLIONAIRE was called by Publisher?s
Weekly in a Starred Review, ?A top-notch,
how-to guide on launching a business.?a rare
gem.? Based on Lavine?s personal journey,
the nonfiction bestseller chronicles her
story of taking her simple consumer product
into almost every major retail chain in
America within two years, while raising
angel capital and recruiting world-class
talent to work for her company.
Significant Shareholders
Keith Smithson ? Director of Sports Vision ?
Optometry: Mr. Smithson is a graduate of the
University of Delaware and Pennsylvania
College of Optometry. He is one of the most
sought after sports vision specialist for
his work with athletes in the NHL, NBA, MLB,
WNBA and MLS. He serves as the Optometrist
for over 10 Pro teams including the
Washington Wizards, Washington Nationals and
DC United. Smithson has also served as a
sports vision consultant for the Baltimore
Ravens, Washington Freedom, Washington
Mystics and Nike. He has been written about
in several large publications including ESPN
and Sports Illustrated. Dr. Smithson is a
member of the Sports Vision section of the
American Optometric Association and the
Virginia Optometric Association.
Christopher M. Chambers ? Director of Sports
Shooting Markets: Mr. Chambers is a graduate
of the U.S. Military Academy at West Point
(BS, Engineering) and the Wharton School of
Business (MBA, Finance & Multinational
Management). Mr. Chambers was a key leader
in Laser Shot, Inc. (A Simulation Technology
Company), where he served in various
positions including President, Chief
Development Officer (CDO), and Vice
President for Corporate Strategy and
Business Development. The company
experienced a tripling of annual revenue (to
$27 M), with additional contract backlog of
$21M profit, and numerous new product
offerings during his leadership tenure.
Throughout his half decade at Laser Shot,
Mr. Chambers chose to retain direct
responsibility for all Business Development
activity, booking many high impact contracts
and subcontracts worth dozens of millions of
dollars including two DOD Programs-of-Record
worth over $54 Million.
?
COMPENSATION OF DIRECTORS AND EXECUTIVE
OFFICERS
The following table sets forth information
about the annual compensation of each of our
three highest paid persons who were
executive officers or directors during our
last completed fiscal year.
Capacities in which compensation Cash
compensation Other compensation Total
compensation
Name was received ($) ($) ($)
Ben White Chief Executive Officer 0 -0-
0
Oliver Marmol Chief Operating Officer 0
-0- 0
Kim Lavine Chief Financial Officer 0
-0- 0
Compensation of Directors
We do not compensate our directors for
attendance at meetings. We reimburse our
officers and directors for reasonable
expenses incurred during the course of their
performance. We have no long-term incentive
plans.
Future Compensation
Compensation to be paid to the three
individuals listed in the table above for
the next fiscal year subsequent to our
capital raise is as follows: Ben White -
$250,000 annual salary, Oliver Marmol -
$180,000 annual salary, Kim Lavine -
$180,000 annual salary.
?
? SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN SECURITY HOLDERS
Set forth below is information regarding the
beneficial ownership of our preferred and
common stock, as of July 20, 2016 by (i)
each person whom we know owned,
beneficially, more than 10% of the
outstanding shares of our common stock, and
(ii) all of the current directors and
executive officers as a group. We believe
that, except as otherwise noted below, each
named beneficial owner has sole voting and
investment power with respect to the shares
listed. Unless otherwise indicated herein,
beneficial ownership is determined in
accordance with the rules of the Securities
and Exchange Commission, and includes voting
or investment power with respect to shares
beneficially owned.
Common Stock
Name & Address of beneficial owner (1)
Amount of nature of beneficial
ownership (2) Amount and nature of
beneficial acquirable Percent of class
(3)
Ben White 1,000,000 0 20%
Oliver Marmol 125,000 0 .025%
Kim Lavine 50,000 0 .01%
(1) The address of those listed is C/O
Sensory Performance Technology, Inc. 26 East
12th Street, Linden, NJ 07036
(2) Unless otherwise indicated, all shares
are owned directly by the beneficial owner.
(3) Based on 5 million shares outstanding
prior to this offering.
Preferred Stock
Name & Address of beneficial owner (1)
Amount of nature of beneficial
ownership (2) Amount and nature of
beneficial acquirable Percent of class
(3)
Ben White 250 0 25%
Oliver Marmol 125 0 12.50%
Kim Lavine 50 0 5%
(1) The address of those listed is C/O
Sensory Performance Technology, Inc. 26 East
12th Street, Linden, NJ 07036
(2) Unless otherwise indicated, all shares
are owned directly by the beneficial owner.
(3) Based on 1,000 shares outstanding prior
to this offering.
?
INTEREST OF MANAGEMENT AND OTHERS IN CERTAIN
TRANSACTIONS
Ben White
The intellectual property of our wearable
training technology was developed by Founder
and CEO Ben White. Ben White assigned all
rights to the intellectual property to the
Company, valued at $20,000,000, in exchange
for $1,000,000 cash and 250 shares of
preferred stock and 1,000,000 shares of
common stock in the Company in July 2016 and
for his services in forming and organizing
Sensory Performance Technology, Inc.
Future Transactions
All future affiliated transactions will be
made or entered into on terms that are no
less favorable to us than those that can be
obtained from any unaffiliated third party.
A majority of the independent, disinterested
members of our board of directors will
approve future affiliated transactions, and
we will maintain at least two independent
directors on our board of directors to
review all material transactions with
affiliates.?
SECURITIES BEING OFFERED
Our authorized capital stock consists of
5,000,000 shares of common stock, no par
value, and 1,000 shares of preferred stock,
no par value. As of July 15, 2016, we had
3,825,000 shares of common stock and 575
shares of preferred stock outstanding.
The following is a summary of the rights of
our capital stock as provided in our
articles of incorporation and bylaws. For
more detailed information, please see our
articles of incorporation and bylaws, which
have been filed as exhibits to the offering
statement of which this offering circular is
a part.
Common Stock
Voting Rights. The holders of the preferred
stock are entitled to one vote for each
share held of record on all matters
submitted to a vote of the shareholders.
Delaware law provides for cumulative voting
for the election of directors. As a result,
any shareholder may cumulate his or her
votes by casting them all for any one
director nominee or by distributing them
among two or more nominees. This may make it
easier for minority shareholders to elect a
director.
Dividends. Subject to preferences that may
be granted to any then outstanding preferred
stock, holders of common stock are entitled
to receive ratably such dividends as may be
declared by the board of directors out of
funds legally available therefor as well as
any distributions to the shareholders. The
payment of dividends on the common stock
will be a business decision to be made by
our board of directors from time to time
based upon results of our operations and our
financial condition and any other factors
that our board of directors considers
relevant. Payment of dividends on the
common stock may be restricted by loan
agreements, indentures and other
transactions entered into by us from time to
time.
Liquidation Rights. In the event of our
liquidation, dissolution or winding up,
holders of common stock are entitled to
share ratably in all of our assets remaining
after payment of liabilities and the
liquidation preference of any then
outstanding preferred stock.
Absence of Other Rights or Assessments.
Holders of common stock have no
preferential, preemptive, conversion or
exchange rights. There are no redemption or
sinking fund provisions applicable to the
common stock. When issued in accordance with
our articles of incorporation and law,
shares of our common stock are fully paid
and not liable to further calls or
assessment by us.
Preferred Stock
Our board of directors is authorized by our
articles of incorporation to establish
classes or series of preferred stock and fix
the designation, powers, preferences and
rights of the shares of each such class or
series and the qualifications, limitations
or restrictions thereof without any further
vote or action by our shareholders. Any
shares of preferred stock so issued would
have priority over our common stock with
respect to dividend or liquidation rights.
Any future issuance of preferred stock may
have the effect of delaying, deferring or
preventing a change in our control without
further action by our shareholders and may
adversely affect the voting and other rights
of the holders of our common stock. At
present we have no plans to issue any
additional shares of preferred stock or to
adopt any new series, preferences or other
classification of preferred stock.
The issuance of shares of preferred stock,
or the issuance of rights to purchase such
shares, could be used to discourage an
unsolicited acquisition proposal. For
instance, the issuance of a series of
preferred stock might impede a business
combination by including class voting rights
that would enable a holder to block such a
transaction. In addition, under certain
circumstances, the issuance of preferred
stock could adversely affect the voting
power of holders of our common stock.
Although our board of directors is required
to make any determination to issue preferred
stock based on its judgment as to the best
interests of our shareholders, our board
could act in a manner that would discourage
an acquisition attempt or other transaction
that some, or a majority, of our
shareholders might believe to be in their
best interests or in which such shareholders
might receive a premium for their stock over
the then market price of such stock. Our
board presently does not intend to seek
shareholder approval prior to the issuance
of currently authorized stock, unless
otherwise required by law or applicable
stock exchange rules.
Certain Anti-takeover Effects
General. Certain provisions of our articles
of incorporation, our bylaws, and Delaware
law may have an anti-takeover effect and may
delay or prevent a tender offer or other
acquisition transaction that a shareholder
might consider to be in his or her best
interest. The summary of the provisions of
our articles, bylaws and Arizona law set
forth below does not purport to be complete
and is qualified in its entirety by
reference to our articles, bylaws and
Arizona law.
Special Meetings of Shareholders. Our bylaws
provide that, except as required by law,
special meetings of shareholders may be
called by a majority of our Board of
Directors, the Chairman of the Board, the
President, or shareholders who hold in the
aggregate at least 25% of the voting power
of the outstanding capital stock of the
Company (?Requesting Shareholders?).
Requesting Shareholders must meet certain
qualifications and must submit a written
request to our Corporate Secretary,
containing the information required by our
bylaws. A request for a special meeting made
by Requesting Shareholders may be rejected
if (1) a meeting of shareholders that
included an identical or substantially
similar item of business, as determined in
good faith by our Board of Directors, was
held not more than 90 days before our
Corporate Secretary received the request;
(2) our Board of Directors has called or
calls for a meeting of shareholders to be
held within 90 days after our Corporate
Secretary receives the request and our Board
of Directors determines in good faith that
the business to be conducted at such meeting
includes similar business to that stated in
the request; or (3) the request relates to
an item of business that is not a proper
subject for shareholder action under, or
involves a violation of, applicable law.
Shareholder Proposals and Director
Nominations. A shareholder can submit
shareholder proposals and nominate
candidates for election to our Board of
Directors in connection with our annual
meeting if he or she follows the advance
notice and other relevant provisions set
forth in our bylaws. With respect to
director nominations at an annual meeting,
shareholders must submit written notice to
our Corporate Secretary at least 180 days
prior to the date of the meeting. With
respect to shareholder proposals to bring
other business before the annual meeting,
shareholders must submit a written notice to
our Corporate Secretary not fewer than 90
nor more than 120 days prior to the first
anniversary of the date of our previous
year?s annual meeting of shareholders.
However, if we have changed the date of the
annual meeting by more than 30 days from the
anniversary date of the previous year?s
annual meeting, the written notice must be
submitted no earlier than 120 days before
the annual meeting and not later than 90
days before the annual meeting or ten days
after the day we make public the date of the
annual meeting.
A shareholder must also comply with all
applicable laws in proposing business to be
conducted and in nominating directors. The
notice provisions of the bylaws do not
affect rights of shareholders to request
inclusion of proposals in our proxy
statement pursuant to Rule 14a-8 of the
Exchange Act.
Amendment to Articles of Incorporation and
Bylaws. Both the Board of Directors and the
shareholders must approve amendments to an
Arizona corporation?s articles of
incorporation, except that the Board of
Directors may adopt specified ministerial
amendments without shareholder approval.
Unless the articles of incorporation,
Arizona law or the Board of Directors would
require a greater vote or unless the
articles of incorporation or Arizona law
would require a different quorum, the vote
required by each voting group allowed or
required to vote on the amendment would be:
? a majority of the votes entitled to be
cast by the voting group, if the amendment
would create dissenters? rights for that
voting group; and
? in any other case, if a quorum is
present in person or by proxy consisting of
a majority of the votes entitled to be cast
on the matter by the voting group, the votes
cast by the voting group in favor of the
amendment must exceed the votes cast against
the amendment by the voting group.
The Board of Directors may amend or repeal
the corporation?s bylaws unless either: (1)
the articles or applicable law reserves this
power exclusively to shareholders in whole
or in part or (2) the shareholders in
amending or repealing a particular bylaws
provide expressly that the Board may not
amend or repeal that bylaw. A Delaware
corporation?s shareholders may amend or
repeal the corporation?s bylaws even though
they may also be amended or repealed by the
Board of Directors. Our bylaws may not be
amended or repealed without the vote of a
majority of the Board of Directors then in
office or the affirmative vote of a majority
of votes cast on the matter at a meeting of
shareholders.
Transfer Agent and Registrar
VStock Transfer, LLC, 18 Lafayette Place,
Woodmere, New York 11598 is the transfer
agent and registrant for our common stock.
?
PLAN OF DISTRIBUTION
We are offering a minimum of 625,000 shares
of common stock and a maximum of 1,250,000
shares of common stock on a ?best efforts?
basis. If $10,000,000 in subscriptions for
the shares (the ?Minimum Offering?) is not
deposited in escrow on or before December
31, 2016 (the ?Minimum Offering Period?),
all subscriptions will be refunded to
subscribers without deduction or interest.
Subscribers have no right to a return of
their funds during the Minimum Offering
Period. If this minimum offering amount has
been deposited by December 31, 2016, the
offering may continue until the earlier of
March 31, 2016 (which date may be extended
at our option) or the date when all shares
have been sold. We reserve the right to
accept subscriptions for up to an additional
312,500 shares, for an additional $5,000,000
in gross proceeds (the ?Over-Subscription
Option?).
We are not selling the shares through
commissioned sales agents or underwriters.
We will use our existing website,
www.sensorypt.com, to provide notification
of the offering. Persons who desire
information will be directed to
https://www.startengine.com/startup/eclipse-
goggles, a website owned and operated by an
unaffiliated third party that provides
technology support to issuers engaging in
equity crowdfunding efforts. We will pay
StartEngine Crowdfunding, Inc. $50 per
investor in cash and warrants to purchase
shares of our common stock at $16 per share
equal to the cash compensation. The warrants
are exercisable for a period of three years
from the final closing date of this
offering.
This Offering Circular will be furnished to
prospective investors via download 24 hours
per day, 7 days per week on the
startengine.com website.
The startengine.com website will be the
exclusive means by which prospective
investors may subscribe in this offering.
All prospective investors who submitted non-
binding indications of interest (?Interest
Holders?) will be given the first
opportunity to purchase shares, which will
be the seven- business-day period commencing
upon the qualification of this offering by
the Securities and Exchange Commission (SEC)
(the ?Initial Offering Period?). All
Interest Holders have received and will
continue to receive a series of
comprehensive educational emails explaining
the entire process and procedures for
subscribing in the offering and ?what to
expect? on the startengine.com website. Upon
qualification by the SEC, the email strategy
will be supported with a press release to
general and financial media, plus social
media post on Sensory Performance Tech
sites. During the Initial Offering Period,
Interest Holders will be able to log into
the startengine.com website using their
credentials (username and password)
established during the reservation process,
and a button will appear that simply states
?Invest? in Sensory Performance Technology.
Accordingly, persons who are not Interest
Holders will not be able to log into the
website. They will be permitted to leave
their email addresses on a ?waiting list?
and will be notified if an opportunity to
invest arises.
Once the ?Invest? button is clicked,
Interest Holders will again be given a
comprehensive overview of the process and
procedures, which will require an e-
signature. Interest Holders will then begin
a user friendly process of establishing
their personal and financial identity,
selecting the number of shares to be
purchased and how payment will be made, and
executing subscription agreements. Once
complete all purchasers will be emailed a
confirmation.
If by the end of the seven-business-day
period, we receive subscriptions for more
shares than the 1,250,000 being offered, we
will reduce proportionately all
subscriptions received in excess of the $640
minimum purchase. If 1,250,000 shares have
not been sold during the initial seven-
business-day period, the shares will be
offered to the general public. Those on the
waiting list will be notified and we will
also engage in a comprehensive
communications strategy to inform potential
investors of the offering opportunity.
If we receive subscriptions for more than
1,250,000 shares, we will consider the
following factors (in no particular order or
priority) in determining whether and the
extent to which we will utilize the Over-
Subscription Option: the amount of over-
subscription, our immediate cash needs, and
the availability of other sources of
financing.
If the minimum contingency for this offering
is not satisfied or the offering is
otherwise terminated, investor funds will be
promptly refunded in accordance with
Securities Exchange Act Rule 10b-9.
In order to subscribe to purchase the
shares, a prospective investor must complete
a subscription agreement and send payment by
wire transfer or ACH. Investors must answer
certain questions to determine compliance
with the investment limitation set forth in
Regulation A Rule 251(d)(2)(i)(C) under the
Securities Act of 1933, which states that in
offerings such as this one, where the
securities will not be listed on a
registered national securities exchange upon
qualification, the aggregate purchase price
to be paid by the investor for the
securities cannot exceed 10% of the greater
of the investor?s annual income or net
worth. In the case of an investor who is not
a natural person, revenues or net assets for
the investor?s most recently completed
fiscal year are used instead.
The investment limitation does not apply to
accredited investors, as that term is
defined in Regulation D Rule 501 under the
Securities Act of 1933. An individual is an
accredited investor if he/she meets one of
the following criteria:
? a natural person whose individual net
worth, or joint net worth with the
undersigned?s spouse, excluding the ?net
value? of his or her primary residence, at
the time of this purchase exceeds $1,000,000
and having no reason to believe that net
worth will not remain in excess of
$1,000,000 for the foreseeable future, with
?net value? for such purposes being the fair
value of the residence less any mortgage
indebtedness or other obligation secured by
the residence, but subtracting such
indebtedness or obligation only if it is a
liability already considered in calculating
net worth; or
? a natural person who has individual
annual income in excess of $200,000 in each
of the two most recent years or joint annual
income with that person?s spouse in excess
of $300,000 in each of those years and who
reasonably expects an income in excess of
those levels in the current year.
An entity other than a natural person is an
accredited investor if it falls within any
one of the following categories:
? an employee benefit plan within the
meaning of Title I of the Employee
Retirement Income Security Act of 1974, as
amended, (i) if the decision to invest is
made by a plan fiduciary which is either a
bank, savings and loan association,
insurance company, or registered investment
adviser; (ii) if such employee benefit plan
has total assets in excess of $5,000,000; or
(iii) if it is a self-directed plan whose
investment decisions are made solely by
accredited investors;
? a tax-exempt organization described in
Section 501(c)(3) of the Internal Revenue
Code, a corporation, a Massachusetts or
similar business trust or a partnership,
which was not formed for the specific
purpose of acquiring the securities offered
and which has total assets in excess of
$5,000,000;
? a trust, with total assets in excess of
$5,000,000, which was not formed for the
specific purpose of acquiring the securities
offered, whose decision to purchase such
securities is directed by a ?sophisticated
person? as described in Rule 506(b)(2)(ii)
under Regulation D; or
? certain financial institutions such as
banks and savings and loan associations,
registered broker-dealers, insurance
companies, and registered investment
companies.
We have engaged FundAmerica Securities, LLC,
a broker-dealer registered with the
Securities and Exchange Commission and a
member of the Financial Industry Regulatory
Authority (FINRA), to perform the following
administrative functions in connection with
this offering in addition to acting as the
escrow agent:
? review the subscription agreements to
determine whether all of the necessary
information has been obtained from the
investors, to determine compliance with the
investment limitation requirement, and to
perform anti-money laundering checks;
? contact us and/or our agents, if
needed, to gather additional information or
clarification from investors;
? advise us as to permitted investment
limits for investors pursuant to Regulation
A, Tier 2;
? provide us with prompt notice about
inconsistent, incorrect or otherwise flagged
subscriptions (e.g., for underage investors
or anti-money laundering reasons);
? serve as registered agent where
required for state blue sky requirements,
but in no circumstance will FundAmerica
solicit a securities transaction, recommend
our securities, or provide investment advice
to any prospective investor; and
? transmit the subscription information
data to VStock Transfer, LLC, our transfer
agent.
As compensation for the services listed
above, we have agreed to pay FundAmerica
Securities $2.00 per domestic investor for
the anti-money laundering check, bad actor
checks for us and our related parties (up to
10 checks at $30 per check), and a fee equal
to 1.0% of the gross proceeds from the sale
of the shares offered hereby. If we elect to
terminate the offering prior to its
completion, we have agreed to reimburse
FundAmerica Securities for its out-of-pocket
expenses incurred in connection with the
services provided under this engagement
(including costs of counsel and related
expenses) up to an aggregate cap of $10,000.
In addition, we will pay FundAmerica
Securities $225 for escrow account set up
and a monthly administration fee of $25 per
month for so long as the offering is being
conducted, but in no event longer than six
months, up to $15.00 per investor (depending
on whether subscription is by ACH or wire)
for processing incoming funds, and $15.00
per wire for outbound funds to us upon the
closing of this offering. We will also pay
FundAmerica Securities a technology service
fee for the technology services provided by
its affiliate, FundAmerica Technologies,
LLC, of $2.00 for each subscription
agreement executed via electronic signature.
We will cap itemized fees to FundAmerica at
$399,690 for the minimum subscription amount
required to close and up to $953,790 in if
we achieve the maximum offering proceeds
including the full over-subscription amount.
Sensory Performance Technology employees are
assisting with preparing the materials sent
via email to persons who have submitted non-
binding indications of interest and posted
on Sensory Performance Technology websites.
They also work with startengine.com in
developing the programming to be used for
the actual investment process. They do not
have direct telephone, email exchanges or
other contact with persons interested in
purchasing the offered securities, except to
gather additional information or
clarification from persons who have
subscribed to purchase securities on the
startengine.com website.?
FINANCIAL STATEMENTS
Balance Sheets at August 31, 2016
39
Income Statement at August 31, 2016
40
Statement of Stockholders Equity at August
31, 2016 41
Projected Balance Sheet
42
Projected Income Statement
43
Sales Assumptions
44
Notes to Sales Assumptions
45
Projected Cash Flow Statements for 5 Years
47
Notes to Financial Statements August 31,
2016 52
BASIS OF PRESENTATION
The accompanying financial statements have
been prepared by the Company, without audit,
and reflect all adjustments which are, in
the opinion of management, necessary for a
fair statement of the results for the
periods presented. The financial statements
have been prepared in accordance with
accounting principles generally accepted in
the United States of America (GAAP) for
financial reporting. Certain information and
footnote disclosures normally included in
financial statements prepared in accordance
with GAAP have been condensed or omitted
pursuant to such rules and regulations. In
the opinion of management, the consolidated
financial statements reflect all adjustments
(of a normal and recurring nature) which are
necessary for a fair presentation of the
financial position, results of operations
and cash flows for the interim periods
presented. The results of operations for the
eight months ended August 31, 2016 are not
necessarily indicative of the results to be
expected for the entire fiscal year.?
BALANCE SHEET
?
INCOME STATEMENT
STATEMENT OF STOCKHOLDERS EQUITY
?
PROJECTED BALANCE SHEET
?
PROJECTED INCOME STATEMENT
?
SALES ASSUMPTIONS
NOTES TO SALES ASSUMPTIONS
Sensory Performance Technology, Inc. (a
Delaware Corporation) (the ?Company?), was
formed on January 14, 2016. The Company is a
research and development technology company
producing innovative and patented wearable
tech product solutions to athletes,
consumer, military, law enforcement and
medical industries worldwide.
The Product
The Company is in the process of bringing to
the consumer marketplace our flagship
product, Eclipse Goggles, currently in high-
demand with some of the most prominent names
in professional sports, through online and
brick-and-mortar retail distribution
outlets, with two different models available
with MSRP of $400 to $500. All of our sales
forecasts are based on bringing two SKUS of
our flagship product, Eclipse Goggles, into
domestic markets exclusively. Our forecasted
revenues are based on capturing a percentage
of ?doors? of major sporting goods retailers
only, and do not take into account any
revenues resulting from the development of
additional SKUS, penetration into global
markets, or ancillary revenues to be derived
from our online training academy, nor do
they take into account the distribution of
our products through non-primary sporting
goods retailers. In addition, the
opportunity for significant additional
revenues through the development of our
patented stroboscopic technology for
military, medical and law enforcement
applications are not included in these
financial forecasts, even though at this
time prototypes of our product are currently
being evaluated by notable and respected
military and medical organizations.
Manufacturing and Prototyping
We are currently vetting manufacturing,
sales, and marketing strategic partners who
already have placement of successful
products in our target retailers. With a
goal to achieve speed-to-market advantage in
this sector, we have entered into a
preliminary Operating Agreement as a first
step towards securing this working
relationship. We have been developing in
good faith with our strategic partner?s
product prototypes including detailed
performance specifications, design,
packaging, branding, and supply chain
logistics, leveraging their existing
contacts with factories based in Taiwan,
with whom we will subcontract all our
manufacturing.
COGS
Subject to further determination based on
strategic partnership analysis, we are
anticipating co-launching two models of the
Eclipse Goggles for the consumer retail
sporting goods market, a basic model for the
entry-level athlete priced at $400 MSRP and
a higher-end model with more robust features
for the serious athlete priced at $500 MSRP.
Based on our ongoing prototyping, we have
determined that we can achieve our target
objective of offering 2 SKUS to consumers at
our target MSRP of $400-$500, without
exceeding a 50% COGS of forecasted wholesale
costs.
Wholesale Cost
We are forecasting average wholesale costs
of our two SKUS for Eclipse Goggles to be
$200 and $250, with a MSRP of $400 and $500
respectively. Our market research with
target end-users has demonstrated that our
forecasted retail price is acceptable and
reasonable in comparison to popular
?performance enhancing? sporting goods
products in demand by juvenile and adult
consumers active in both recreational and
aspiring professional sports across all
disciplines, including baseball bats at $399
, basketball shot trainers at $349.99 , and
football accuracy training devices at
$499.99 .
Sales Assumptions
We are forecasting a market penetration in
Year 1 of 5% of major national sporting
goods retailer, for a total of 755 stores.
We are anticipating selling a case of each
SKU (one dozen per case), each month for 12
months, for a total of 217,454 units sold in
a 12-month period, accounting for annual
wholesale revenues of $64,800 per
store/door, totaling $48,927,240 for the 12-
month period. These sales assumptions do not
take into account any revenue resulting from
the expansion of SKUS, distribution through
non-sporting-goods-specific mass market
retailers, or penetration into global
markets. We are forecasting on average fixed
expenses not to exceed 20% of gross
revenues, and a COGS not to exceed 50% of
gross revenues. We forecast market
penetration of major national sporting goods
retailers only in Year 2 to increase to 20%
or 3,020 stores/doors, Year 3 to 50% or
7,551 stores/doors, Year 4 to 70% or 10,571
stores/doors, and Year 5 to 80% or 12,081.
To put these numbers in perspective,
currently the largest retailer of sporting
goods in the U.S. is Walmart, with over
6,500 stores. Based on our management teams?
successful track record introducing consumer
products into the retail marketplace, we
believe these sales forecasts are reasonable
and prudent without risking the danger of
under-forecasting our expectations to scale.
Market Testing
Our Sales Assumptions are based on market
testing we?ve conducted since 2014, beta-
testing prototypes of Eclipse Googles with
elite professional athletes through their
training partners, including Accelerate
Basketball, with whom we?ve executed a
strategic partnership. The Eclipse Goggles
have been extraordinarily well-received with
unsolicited testimonials citing their
effectiveness in enhancing athletic
performance by some of the worlds? most
celebrated professional athletes, featured
in some of the most reputable print and
television media outlets in the world.
In addition, we have conducted various
market analyses with regard to our wearable
training technology sales forecasts,
including cost analyses, consumer profile,
and cost comparisons to existing wearable
technology devices in the market. Our target
consumer is the recreational and aspiring
professional athlete across all sports
disciplines, with a focus on the domestic
U.S. Market. According to Youth Sports
Statistics, there are 36,000,000 children
aged 5-18 who play organized sports each
year; 66% of boys in that age group play
organized sports in or out of school, and
52% of girls. Eighty-five percent of those
36 million children participating in
organized sports are being coached by their
fathers. An additional 15 million adults
played organized sports in the U.S. in 2014,
with 5.2 million golfers, 3.6 million
playing basketball, 1.3 million tennis
players, 1.1 million soccer players, 226,000
football players, and 12,000 softball
players.
Marketing
We will be supporting our strategic partners
with a robust commitment to national
advertising, in-store point of purchase
display marketing, and supporting training
video content on our online Academy,
featuring instructional videos from notable
sports training authorities and potentially
celebrity athlete endorsements. We are
anticipating that our fixed expenses will
not exceed twenty percent of our annual
forecasted sales revenues, which will
include advertising and marketing.
?
PROJECTED CASH FLOW YEAR 1 (UNAUDITED)
?
PROJECTED CASH FLOW YEAR 2 (UNAUDITED)
?
PROJECTED CASH FLOW YEAR 3 (UNAUDITED)
?
PROJECTED CASH FLOW YEAR 4 (UNAUDITED)
?
PROJECTED CASH FLOW YEAR 5 (UNAUDITED)
?
NOTES TO FINANCIAL STATEMENTS AUGUST 31,
2016
SENSORY PERFORMANCE TECHNOLOGY, INC
(A DELAWARE CORPORATION)
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2016 (UNAUDITED)
SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Organization and Business Activities
Sensory Performance Technology, Inc. (a
Delaware Corporation) (the ?Company?), was
formed on January 14, 2016. The Company is a
research and development technology company
producing innovative and patented wearable
tech product solutions to athletes,
consumer, military, law enforcement and
medical industries worldwide. The Company is
in the process of bringing to the consumer
marketplace our flagship product, Eclipse
Goggles, currently in high demand with some
of the most prominent names in professional
sports, through online and brick-and-mortar
retail distribution outlets, with two
different models available with MSRP of $400
to $500. In addition to a vertical model of
product design, manufacturing and
distribution, we plan to create and
distribute highly-specialized content
through our ?Online Academy,? featuring
instructional videos from world-class
training partners like Accelerate
Basketball, personal trainers to National
Basketball Association?s Most Valuable
Player of 2016 Steph Curry. Revenues
forecasted from our online training academy
are not included in our sales assumptions
for this offering. In addition, our patented
technology is currently under evaluation by
notable and respected medical and government
agencies, adding potentially significant
additional revenue streams not included in
our sales forecasts. Sensory Performance
Technology has other proprietary
intellectual property including patents,
trade secrets and trademarks, which we plan
to develop applications for in the consumer,
military, law enforcement and medical
industries, the anticipated revenues for
which are not included on our forecasted
revenues and financial projections.
Pursuant to the articles of incorporation,
the Company is authorized to issue 1,000
preferred shares, of which 425 preferred
shares are owned by founding shareholders
(?Series A shares?). The Company?s common
stock and preferred shares have no par
value. The Series A shares are not
convertible, nor are they transferable
without the approval of a majority of the
Board of Directors. The Series A shares rank
senior and prior to the common shares and
any other class of preferred shares with
respect to dividend rights, voting rights,
and rights upon liquidation, winding up or
dissolution. Issued Series A shares shall
accrue and accumulate an 8% cumulative
preferential cash dividend based on the
purchase price per share. Such dividends are
payable when declared by the Board of
Directors of the Company. There were no
preferred shares issued prior to January 14,
2016.
On July 27, 2016, the articles of
incorporation were amended, authorizing
5,000,000 shares of common stock, of which
1,175,000 shares are owned by founding
shareholders.
Liquidity and Capital Resources
The accompanying financial statements have
been prepared on a going-concern basis,
which contemplates the realization of assets
and the satisfaction of liabilities in the
normal course of business. From inception,
the Company has financed its business
activities through contributions from
shareholders. The Company expects to obtain
funding through equity placement offerings
until it consistently achieves positive cash
flow from operations after starting
production. Management expects that cash on
hand combined with anticipated funding
sources will provide the Company with
adequate funding through December 31, 2017.
There are no assurances that the Company
will be able to raise adequate funds,
achieve, or sustain profitability or
positive cash flows from its operations. The
financial statements do not include any
adjustments that might result from the
outcome of this uncertainty.
Through August 31, 2016, the Company has not
recorded any revenues for the sale of its
wearable-tech product nor does it expect to
record revenues of any significant amount of
product prior to distribution in the retail
marketplace.
Once the Company?s planned principal
operations commence, its focus will be on
the manufacturing and marketing of its
Eclipse Goggles throughout the United States
with the development of international
markets across multiple sports including
soccer, hockey, and more. In addition, we
will continue to develop new wearable-tech
applications utilizing this stroboscopic
intellectual property for the military,
medical and law enforcement fields, some of
whom have been analyzing improved
performance metrics demonstrated with the
use of our goggles with promising early
results. In addition, we will continue
research and development of new products
related to our existing patents and
intellectual property, which could develop
additional significant revenue streams above
and beyond our stroboscopic technology
patent and products. The Company may not be
profitable even if it succeeds in
commercializing its product. The Company
expects to make substantial expenditures and
to incur additional operating losses for at
least the next year as we continue to
develop the stroboscopic goggles, increase
manufacturing capacity for production, and
enter into production and marketing
collaborations with other companies, if
available on commercially reasonable terms,
or develop these capabilities internally.
Basis of Accounting
The accompanying financial statements have
been prepared in accordance with accounting
principles generally accepted in the United
States of America (?GAAP?) as contained
within the Financial Accounting Standards
Board (?FASB?) Accounting Standards
Codification (?ASC?).
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 disclosure of contingent assets and
liabilities at the date of the financial
statements and reported amounts of revenue
and expenses during the reporting period.
Significant estimates include the valuation
of services provided in exchange for
preferred and common stock. Actual results
could differ from those estimates.
Cash and Cash Equivalents
For purposes of the statements of cash
flows, the Company considers all highly
liquid unrestricted investments with an
original maturity of three months or less to
be cash equivalents.
Restricted Cash
There is no restricted cash held in escrow.
Property and Equipment
Property and equipment are stated at cost,
less accumulated depreciation and
amortization, and are limited to prototype
models of our Eclipse Goggles and computer
equipment. When assets are retired or
otherwise disposed of, the assets and
related accumulated depreciation and
amortization are eliminated from the
accounts, and any resulting gain or loss is
reflected in operations. Depreciation and
amortization are provided for using the
straight-line method over the estimated
useful lives of the assets.
The estimated useful lives for property and
equipment are as follows:
? Machinery and equipment: 10 years
Accounting for Warrants
The Company has issued no warrants.
Impairment of Long-Lived Assets
In accordance with FASB ASC 360, Property,
Plant and Equipment ? Impairment or Disposal
of Long Lived Assets, property and equipment
and identifiable intangible assets with
estimable useful lives are reviewed for
impairment whenever events or changes in
circumstances indicate that the carrying
amount of an asset may not be recoverable.
Recoverability of assets to be held and used
is measured by a comparison of the carrying
amount of the asset to the estimated
undiscounted future cash flows expected to
be generated by the asset. If the carrying
amount of the asset exceeds its estimated
future cash flows, an impairment charge is
recognized in the amount by which the
carrying amount of the asset exceeds the
fair value of the asset. No impairment
losses were recognized for the period ended
August 31, 2016.
Concentrations of Business and Credit Risk
The business is subject to significant
risks, including, but not limited to, the
risks in the adoption of stroboscopic
technology by the consumer, the reliance on
Company Founder and CEO Ben White, the
results of research and development efforts,
and competition from other stroboscopic
technology manufacturers.
Financial instruments that potentially
subject the Company to concentrations of
credit risk consist principally of cash and
cash equivalents. The Company has its cash
and cash equivalents on deposit with various
financial institutions. Accounts at each
U.S. institution are insured by the Federal
Deposit Insurance Corporation (?FDIC?) up to
$250,000. Cash may at times exceed the
amount covered by FDIC insurance; however
management does not believe the Company has
significant risk in this area.
Income Taxes
The Company is currently taxed as an S
corporation in the United States of America
(?U.S.?). The Company uses the asset and
liability method of accounting for income
taxes in accordance with FASB ASC 740,
Income Taxes (?ASC 740?). Deferred tax
assets and liabilities are recognized for
the future tax consequences attributable to
differences between financial statement
carrying amounts of existing assets and
liabilities and their respective tax bases.
Deferred tax assets and liabilities are
measured using enacted tax rates expected to
apply to taxable income in the years in
which those temporary differences are
expected to be recovered or settled. The
effect on deferred tax assets and
liabilities of a change in tax rates is
recognized as income or expense in the
period that includes the enactment date. The
realizability of deferred tax assets is
assessed throughout the year and a valuation
allowance is established as necessary.
The Company follows the requirements of ASC
740, which clarifies the accounting for
uncertainty in income taxes recognized in a
company?s financial statements and
prescribes a recognition threshold of more
likely than not and a measurement process
for financial statement recognition and
measurement of a tax position taken or
expected to be taken in a tax return. In
making this assessment, the Company must
determine whether it is more likely than not
that a tax position will be sustained upon
examination, based solely on the technical
merits of the position. Management believes
that the Company has taken no uncertain tax
positions as of December 31, 2014 and
therefore no accruals have been made in the
financial statements related to uncertain
tax positions. The Company is subject to
U.S. federal and state income tax
examinations for all years from inception.
No examinations are currently pending.
Advertising Costs
Forecasted advertising costs are expensed as
incurred and are included in sales and
marketing expenses in the accompanying
statements of operations.
Research and Development Costs
Research and development costs are expensed
as incurred. Research and development
expenses consists primarily of contract
engineering services, payroll and employee
benefits of those employees engaged in
research and development activities.
Recent Accounting Pronouncements
In June 2014, the FASB issued a new
accounting standard which eliminates the
requirements for development stage entities
to present inception to date information in
the statements of income, cash flows, and
shareholder equity, label the financial
statements as those of a development stage
entity, and disclose a description of the
development stage activities in which the
entity is engaged. The standard is effective
for interim and annual reporting periods
beginning after December 15, 2014. Early
adoption of the standard is permitted. The
Company adopted the new accounting
pronouncement in 2013. The accompanying
statements of operations, changes in
stockholders? deficit and cash flows have
been prepared accordingly.
Debt Issuance Costs
Deferred financing costs are legal and other
costs incurred in connection with obtaining
new financing. During 2015, FASB Accounting
Standards Update 2015-03, Interest?
Imputation of Interest (Subtopic 835-30)
(?ASU 2015-03?) was issued. ASU 2015-03
simplifies the presentation of debt issuance
costs and requires that debt issuance costs
related to a recognized debt liability be
presented in the balance sheets as a direct
deduction from the carrying amount of that
debt liability, consistent with debt
discounts. The Company has no debt, deferred
financing or debt issuances at this time.
Reclassifications
No reclassifications have been made to the
Company?s financial statements.
Long-Term Debt
The company has no long-term debt at this
time, has issued no convertible notes, or
warrants, nor secured any debt-financing
since its incorporation.
Income Taxes
The Company has not been required to file
corporate income taxes at this time.
Capital Sublease Obligation
The Company has not entered into any short
or long-term leases. We are in discussions
with experienced strategic partners to
subcontract manufacturing through facilities
located in Taiwan or China. These costs are
built into our product COGS.
Stockholders? Deficit
During July of 2016, the Company?s Founder
and CEO Ben White assigned all Intellectual
Property rights related to the patent for
stroboscopic technology, the trademarks
related to Eclipse Goggles, and all other
valuable IP including internet domains and
trade secrets in exchange for 1,000,000
shares of common stock and 250 shares of
preferred stock. The Board of Directors
voted to transfer 125,000 shares of common
and 125 shares of preferred stock to Company
President Oliver Marmol, and 50,000 shares
of common stock and 50 shares of preferred
stock to CFO Kim Lavine in exchange for
services performed on behalf of Sensory
Performance Technology, and in exchange for
financial contributions.
Legal
In management?s opinion, the Company is not
currently involved in any legal proceedings,
which, individually or in the aggregate,
could have a material effect on its
financial condition, operations and/or cash
flows.
Related Party Transactions
The Company has not formalized any related
party transactions at this time.
Subsequent Events
The Company has evaluated subsequent events
that have occurred through September 19,
2016, which is the date that the financial
statements were available to be issued, and
determined that there were no subsequent
events or transactions that required
recognition or disclosure in the financial
statements.
PART II AND III
8
spt-offeringcircularii2.pdf
SPT PART II PDF
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