NOTE 9 – SUBSEQUENT EVENTS

The Company’s management has evaluated subsequent events occurring after December 31, 2013 and through the issuance date of February 18, 2014, and has determined that the following material events and transactions occurred during this period.

On January 15, 2014, our wholly-owned subsidiary, Ekso Acquisition Corp., a corporation formed in the State of Delaware on January 3, 2014 (“Acquisition Sub”) merged (the “Merger”) with and into Ekso Bionics, Inc., a corporation incorporated in the State of Delaware on January 19, 2005. Ekso Bionics, Inc. was the surviving corporation in the Merger and became our wholly-owned subsidiary.

At the closing of the Merger, (a) all shares of Ekso Bionics’ common stock and preferred stock issued and outstanding immediately prior to the closing of the Merger were converted into an aggregate of 42,615,546 restricted shares of our Common Stock, (b) all warrants to purchase Ekso Bionics’ stock outstanding immediately prior to the closing of the Merger were converted into warrants to purchase an aggregate of 621,363 restricted shares of our Common Stock, and (c) all options to purchase Ekso Bionics’ stock outstanding immediately prior to the closing of the Merger were converted into options to purchase an aggregate of 7,586,459 restricted shares of our Common Stock.

Upon the closing of the Merger, under the terms of a split-off agreement and a general release agreement, the Company transferred all of its pre-Merger operating assets and liabilities to its wholly-owned special-purpose subsidiary, PN Med Split Off Corp, a Delaware corporation (“Split-Off Subsidiary”), formed on January 7, 2014. Thereafter, pursuant to the split-off agreement, the Company transferred all of the outstanding shares of capital stock of Split-Off Subsidiary to Pedro Perez Niklitschek and Miguel Molina Urra, the pre-Merger majority stockholders of the Company, and the former officers and sole director of the Company (the “Split-Off”), in consideration of and in exchange for (i) the surrender and cancellation of an aggregate of 17,483,100 shares of our Common Stock held by Messrs. Perez Niklitschek and Molina Urra (which were cancelled and will resume the status of authorized but unissued shares of our Common Stock) and (ii) certain representations, covenants and indemnities.

As a result of the Merger and Split-Off, we discontinued our pre-Merger business and acquired the business of Ekso Bionics, Inc. and will continue the existing business operations of Ekso Bionics, Inc., which is designing, developing, and commercializing exoskeletons to augment human strength, endurance and mobility.

In November 2013, Ekso Bionics, Inc. offered and sold in a private placement to accredited investors $5,000,000 principal amount of its senior subordinated secured convertible notes (the “Bridge Notes”). On January 15, 2014, we closed a private placement offering (the “PPO”) of 20,580,000 Units of our securities, at a purchase price of $1.00 per Unit (or $20,580,000 in the aggregate, including the conversion of the Bridge Notes). Each Unit consists of one share of the our Common Stock and a warrant to purchase one share of Common Stock at an exercise price of $2.00 per share and with a term of five years (the “PPO Warrants”). At the initial closing of the PPO, the entire outstanding principal amount of the Bridge Notes was automatically converted into Units at a conversion price of $1.00 per Unit, and investors in the Bridge Notes received a warrant to purchase a number of shares of Common Stock equal to 50% of the number of shares of Common Stock contained in the Units into which the Bridge Notes were converted, at an exercise price of $1.00 per share for a term of three years (the “Bridge Warrants”). Both the PPO Warrants and the Bridge Warrants have weighted average anti-dilution protection, subject to customary exceptions.

Between January 29, 2014 and February 6, 2014, we issued an additional 9,720,000 Units in subsequent closings of the PPO. Dan Boren and Marilyn Hamilton, each a director of the Company, purchased 20,000 and 200,000 Units, respectively, in the PPO.

In connection with the Merger, we agreed that in the event that the aggregate gross proceeds of the PPO (including the principal of the Bridge Notes) exceeded $20,000,000, we would issue to the pre-Merger Company stockholders, pro rata, a number of restricted shares of our Common Stock such that the aggregate ownership of the pre-Merger Company stockholders (not including any shares of Common Stock purchased by them in the PPO) remained approximately 6.8% of our outstanding Common Stock as of the time of the Merger. We have issued an aggregate of 779,768 shares of our Common Stock to such persons.

In connection with the sale of the Bridge Notes, Ekso Bionics, Inc. paid to Gottbetter Capital Markets, LLC (the “Placement Agent”), a registered broker-dealer, and its permitted subagents aggregate cash commissions of $500,000, which was equal to 10% of funds raised, and warrants to purchase 500,000 shares of our Common Stock, which was equal to 10% of the number of shares of Common Stock into which Bridge Notes would convert at the closing of the Merger and PPO, with an exercise price per share of $1.00 and a term of five years (“Bridge Agent Warrants”). In connection with the PPO, we paid the Placement Agent and its permitted subagents aggregate cash commissions of $2,530,000, which was equal to 10% of the gross proceeds raised from investors in the PPO, and warrants to purchase 2,530,000 shares of our Common Stock, which was equal to 10% of the number of shares of Common Stock included in the Units sold in the PPO (excluding the Units issued upon conversion of the Bridge Notes), with a term of five years and an exercise price of $1.00 per share (the “PPO Agent Warrants”). The Bridge Agent Warrants and the PPO Agent Warrants have weighted average anti-dilution protection, subject to customary exceptions.

We agreed to pay the Placement Agent an additional cash commission of 5% of funds received by the Company from the exercise of Bridge Warrants and PPO Warrants resulting from any future solicitation of the exercise of such warrants by the Company. Any sub-agent of the Placement Agent that introduced investors to the PPO was entitled to share in the cash fees and warrants attributable to those investors as described above.

In addition, in connection with the Merger and the PPO, we issued warrants to purchase 225,000 shares of our Common Stock to the former senior lender of Ekso Bionics, Inc. These warrants have the same terms as the Bridge Warrants.

Before the Merger, the Company’s Board of Directors adopted, and its stockholders approved, our 2014 Equity Incentive Plan (the “2014 Plan”), which provides for the issuance of incentive awards of up to 14,410,000 shares of Common Stock to officers, key employees, consultants and directors. Options to purchase 9,886,459 shares of Common Stock have been granted under the 2014 Plan, including options to purchase 7,586,459 shares of our Common Stock held by holders of options to purchase Ekso Bionics, Inc. common stock prior to the merger and options to purchase an aggregate of 2,300,000 shares of our Common Stock awarded following the closing of the Merger to our executive officers and directors.

Immediately after giving effect to (i) the Merger and (ii) the cancellation of 17,483,100 shares in the Split-Off, and (iii) the final closing of the PPO, there were 78,445,914 issued and outstanding shares of our Common Stock. In addition, immediately after giving effect to the Merger, the Split-Off and the final closing of the PPO,

• investors in the Bridge Notes hold Bridge Warrants to purchase 2,500,000 shares of our Common Stock;
• investors in the PPO and the Bridge Notes hold PPO Warrants to purchase 30,300,000 shares of our Common Stock;
• the Placement Agent and its permitted subagents hold Bridge Agent Warrants to purchase 500,000 shares of our Common Stock and PPO Agent Warrants to purchase 2,530,000 shares of our Common stock;
• warrants to purchase Ekso Bionics, Inc.’s common stock outstanding immediately prior to the closing of the Merger have been converted into warrants to purchase an aggregate of 621,363 shares of our Common Stock, which are currently outstanding;
• other holders hold warrants to purchase 225,000 shares of common stock on the same terms as the Bridge Warrants; and
• there are options to purchase 9,886,459 granted under the 2014 Plan.

No other securities convertible into or exercisable or exchangeable for the Company’s common stock (including options or warrants) are outstanding.

The Merger is being accounted for as a “reverse merger,” and Ekso Bionics, Inc. is deemed to be the acquirer in the reverse merger. Consequently, the assets and liabilities and the historical operations that will be reflected in the financial statements prior to the Merger will be those of Ekso Bionics, Inc. and will be recorded at the historical cost basis of Ekso Bionics, Inc., and the consolidated financial statements after completion of the Merger will include the assets and liabilities of Ekso Bionics, Inc., historical operations of Ekso Bionics, Inc. and operations of the Company and its subsidiaries from the closing date of the Merger. As a result of the issuance of the shares of the Company’s common stock pursuant to the Merger, a change in control of the Company occurred as of the date of consummation of the Merger.

Also on January 15, 2014, we changed our fiscal year from a fiscal year ending on March 31 of each year, which was used in our most recent filing with the SEC, to one ending on December 31 of each year, which is the fiscal year end of Ekso Bionics, Inc.