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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10SB
General Form for Registration of Securities
of Small Business Issuers
Pursuant to Section 12(b) or (g) of
the Securities Exchange Act of 1934
MEDICONSULT.COM, INC.
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(Name of Small Business Issuer in its Charter)
DELAWARE 84-1341886
- - ------------------------------- -------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
33 Reid Street, 4th Floor, Hamilton HM 12, Bermuda
------------------------------------------------------------
(Address of Principal Executive Offices, Including Zip Code)
(441) 296-0736
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(Issuer's Telephone Number)
Securities to be registered pursuant to Section 12(b) of the Act: NONE
Securities to be registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.001 PAR VALUE.
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PART I
ITEM 1. DESCRIPTION OF BUSINESS.
The Company is a consumer marketing company featuring a "virtual medical
clinic" on the World Wide Web which provides patient oriented medical
information and moderated support to patients, families and health care
professionals. This website provides information and services for over 50
medical topics. According to records maintained by the Company, the Company's
website received in excess of 180,000 visits during the month of March 1997.
The Company's sources of revenues are expected to include: (1)
advertising and sponsorship fees charged to pharmaceutical and medical supply
companies; (2) on-line sales of books and medical supplies; (3) user fees
derived from the Consult-Our-Specialist service; (4) consulting services; (5)
franchising content; and (6) off-line newsletter subscriptions.
HISTORY OF THE COMPANY
Mediconsult.com, Inc. (the "Company") was formed under the laws of the
State of Colorado in October 1989, for the purpose of creating a corporate
vehicle to seek and acquire a business opportunity. The Company was
incorporated under the name Waterford Capital, Inc., and conducted no business
until the acquisition of Mediconsult.com Limited, a Bermuda corporation, in
April 1996.
On April 23, 1996, the Company acquired all of the outstanding stock of
Mediconsult.com, Limited ("MCL"), a Bermuda corporation, in exchange for
11,000,000 shares of the Company's authorized but unissued Common Stock. Such
shares were issued to the former shareholders of MCL and represented
approximately 80% of the Company's Common Stock outstanding. As a result of
this transaction, there was a change in control of the Company, and new
officers and directors selected by MCL were elected. MCL was formed for the
purpose of creating a "virtual medical clinic" on the World Wide Web.
During May 1996, the Company conducted a small offering pursuant to Rule
504 under Regulation D in which it raised $25,985 by selling 1,039,400 shares.
On August 12, 1996, the Company effected a 20 for 1 forward stock split
of the Company's Common Stock and on October 23, 1996, the Company effected a
10 for 1 forward stock split of the Company's Common Stock. All financial
information and share data in this Registration Statement gives retroactive
effect to these two stock splits.
All references to the "Company" herein refers to the Company and MCL,
the Company's wholly-owned subsidiary, unless the context otherwise requires.
The Company generally conducts business through its wholly-owned subsidiary
with the parent company acting as a holding company.
On December 4, 1996, the Company merged with a newly-formed, wholly-owned
subsidiary having the same name for the purpose of changing the
Company's domicile from Colorado to Delaware.
HISTORY OF MCL
MCL was incorporated under the laws of Bermuda on April 11, 1996. Mr.
Robert Jennings and Dr. Michel Bazinet, the founders of MCL, developed MCL's
business plan and the website was launched on July 1, 1996, with 10 medical
topics. Forty more topics were added in October, November and December 1996.
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During July through September 1996, a management team headed by Ian
Sutcliffe was hired, and additional staff was hired to fill out various site
development, content acquisition, research promotion and marketing positions.
A public relations program was test-launched in late September, boosting
site traffic and raising the profile of the organization. A test-advertising
campaign was launched in mid-November to further build traffic volume and
develop further advertising ideas. On December 6, 1996 the Company commenced
offering persons the opportunity to submit questions to medical experts for a
fee, and during February 1997 a media relations and advertising campaign was
launched.
Sponsor marketing began November 1, 1996, with a marketing newsletter
and telephone campaign. During January 1997, the Company started aggressively
pursuing pharmaceutical companies to advertise on the Company's web site.
In January 1997, the Company started advertising on Yahoo, WebCrawler,
America On Line, Lycos and several other search engines on the Internet. In
addition, the Company posts messages to news groups to promote the site to
users on the Internet. In February 1997, the Company hired Dewe Rogerson,
Inc., a media relations firm in New York, to actively promote the Company and
its website to the media. This offline activity includes arranging for media
interviews, press coverage, distributing news releases, and any other activity
that might raise the Company's profile.
During March 1997, the Company received a letter from CompuServe
Incorporated ("CompuServe") indicating their desire to enter into an agreement
with the Company pursuant to which CompuServe's subscribers would be provided
direct access to the Company's website. The Agreement is expected to be
signed by the second week of April 1997.
During April 1997, the Company entered into an agreement with IBM Canada
Ltd. which basically has two components. First, the Company will work with
IBM Canada to build a website for the Company's online medical products store
using IBM's Net.commerce software. Secondly, the Company's staff will work in
a consulting capacity to IBM Canada to build a roadmap for the implementation
of Net.commerce for small and medium-sized customers.
Since November 1996, the Company has signed content and marketing
agreements with twelve non-profit patient support organizations. The
agreements provide for sharing of medical information, sales of videotapes,
books and other products, online donation and membership registration for
conferences and association services; all via the Company's proposed secure
transactions area. Generally, these agreements provide that the Company will
be paid a referral fee based on a percentage of the purchase price of items
sold through the Company's store or other payments made to the organization
plus credit card processing charges. Organization members will also be able
to participate in the Company's online services including moderated discussion
groups to obtain timely information and emotional support.
The organizations that have agreements with the Company are:
-- The Brain Tumor Society
-- Chronic Fatigue Syndrome & Immunological Disorders Association
of America
-- MidLife Woman (Menopause)
-- US TOO! (Prostate Cancer)
-- National Stroke Association
-- American Liver Foundation
-- Testicular Cancer Resource Center
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-- National Depression/Manic-Depression Association
-- American Sleep Apnea Association
-- Leukemia Society of America
-- CHADD (Children and Adults with Attention Deficit Disorders)
During April 1997, the Company signed an agreement with CenterWatch,
Inc., a leading clinical trial organization, pursuant to which the Company
will present educational and other material on clinical trials and provide
leads to CenterWatch for a flat monthly fee.
During April 1997, the Compay signed an agreement with the Canadian
syndicated television show, "Doctor on Call", to co-brand the show and the
site and co-market both companies to advertisers.
BUSINESS - INTRODUCTION
The Company is a consumer marketing company featuring a "virtual medical
clinic" on the World Wide Web. The Company's objective is to create a high
quality content destination on the Internet, attract visitors who will find
the information valuable and generate revenue from visitors and advertisers.
The Company also intends to reach non-Internet users through newsletters,
CD-Roms, television and other vehicles.
While the initial focus of the business is catering to the needs of
patients, there are many natural extensions to pursue in the future, including
physicians, plastic surgeons, pharmacies and other health care segments. The
content is presented in English and can be easily translated into other
languages to expand the market opportunity.
The Company's objective is to generate revenue from website advertising,
sponsorships, product and service sales, consulting services, franchising
content, and newsletter subscriptions and advertising. Access to the site
will be free, however special services will be available for a fee.
The Company's marketing strategy has two components. First, the Company
is executing a consumer public relations and advertising campaign to attract
visitors to the site and raise awareness of the site. This campaign includes
online and off-line activities. Second, the Company is conducting a sponsor
public relations and advertising campaign to attract advertising agencies,
pharmaceutical firms, health management organizations, pharmacy chains,
medical device manufacturers, clinical trial companies, biotechnology firms
and other health care providers as advertisers and sponsors.
THE INTERNET SITE
The Company's Internet site is designed from the ground up with the
consumer in mind. The objective is to develop an empowered patient who
achieves improved health. The site strives to provide "one-stop shopping" for
customer medical information. The vast majority of services are provided free
to the visitor.
All information and services are organized into 50 different medical
condition topics. Some of the topics included are: attention deficit
disorder, AIDS, allergies, alzheimer's disease, arthritis, asthma, breast
cancer, bronchitis, colorectal cancer, depression, diabetes, erectile
dysfunction, headache/migraines, heart disease, infertility, lung cancer,
melatonin, menopause/osteoporosis, obesity, hypertension, pregnancy, prostrate
cancer, sleep disorder, spinal cord injury, sexually transmitted diseases,
stress and strokes. Additional sites will be added in the future.
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Services: For each listed medical topic the site offers a combination
of the following services:
* Journal Club: The Journal Club provides summaries of
articles from leading, peer-reviewed medical journals (e.g., New England
Journal of Medicine) that would be of interest to patients, friends and
families. The summaries of the articles are prepared by qualified medical
journalists who are hired as independent contractors/consultants by the
Company.
* Support Group: Users can post messages, ideas or responses
to an e-mail bulletin board that is moderated by a health care professional.
* Conference Highlights: Selected papers presented to major
medical conferences are summarized by qualified medical journalists and
presented in the same manner as the Journal Club within days of the medical
conference ending.
* Educational Material: This section includes basic primer
information on each topic as well as specific material provided by
organizations such as the National Institute of Health, pharmaceutical
companies, major associations for each condition, leading hospitals and
prominent support groups.
* Drug Information: This database provides detailed
information on drugs used to treat specific medical conditions. The
information is from the US Pharmacopoeia database and is supplemented by
information from pharmaceutical firms and other health organizations. The
database includes 30 areas of information on each drug, including side
effects, missed dosage, pregnancy implications and interactions with other
medications.
* Outside Sources: This service contains a list of links to
selected Internet sites covering the medical topic of interest. A brief
description of the linked site is included to assist the user in selecting the
best site.
* Consult-Our-Specialist: This service currently provides a
visitor to the site with tailored information based on the specific
information submitted by the visitor, from one of four prostate cancer
specialists. Visitors can select the individual specialist most appropriate
to their needs based on the specific credentials and experience of each
physician. The Company intends to add specialists in other fields in the
future. A visitor who desires to use this service is asked to complete a
questionnaire with complete background information and the specific
hypothetical questions he would like answered. The request and response are
both processed in such a manner that they are private and not accessible to
other users of the site. The specialists who respond to these requests
provide only general information and they do not provide medical advice or
diagnoses, and they do not make any patient-specific recommendations. The
user is instructed that the specialist is not the user's personal physician,
and that the specialist will not know the identity of the user, but will be
asked the question in a hypothetical format.
As of the date of this Report, less than a dozen persons have utilized
this service and the Company is currently redesigning this portion of its site
to make it more user friendly.
The physician specialists execute consulting agreements with the Company
in which they agree to act as independent contractors and to be compensated
based on a set fee for each report they prepare.
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* Medical Supplies: This section is not yet operational, but
it is expected to be open by the end of April 1997. Users will be able to
purchase hard to find medical products, devices and services which are shipped
for home delivery. The Company will in essence have a medical supply store.
The Company has agreed to use IBM's Net.Commerce software for its on-line
store.
* Patient Associations: This service provides links to
patient associations involved with the medical conditions covered in the
topic. A detailed introduction to the association is provided. Through these
links, a user has access to membership information, additional material on the
medical topic, and products and services offered by the association. As of
March 31, 1997, twelve associations are represented on the Company's website.
* Bookstore: This service provides a list of recommended
reading materials with a review prepared by the Company. The books can be
purchased on-line through the link to the Amazon.com on-line bookstore.
Stepping outside of the Internet, there are thousands of patients
wanting the same quality of information organized into specific topics -- who
do not have access to the Internet. The Company has thousands of pages of
documents, and it is only reaching a small percentage of the people who are
sick. To service this demand, the Company intends to publish off-line
newsletters in the future. The Company believes that it has enough content to
publish a monthly issue on most topics which are included on the website.
CONSULTING
The Company has developed a comprehensive Internet Marketing
Methodology[TM] which can be utilized to help other businesses develop
successful internet marketing strategies. The Company has recently commenced
consulting assignments with IBM Canada Ltd., Microsoft Canada, Inc., and
Hofman la Roche.
MARKET AND MARKETING STRATEGY
Thus far, the Company's website has been visited by patients (76%),
their families and friends (18%) and some health professionals. The Company
received in excess of 180,000 visits to its website during the month of March
1997. Each visitor downloaded an average of four documents per visit (720,000
documents per month).
The Company's mission is to help patients make better health care
decisions, communicate more effectively with health care providers and promote
compliance with appropriate therapies.
The business strategy is to attract high quality visitors to the site
and provide them with information, services and products pertinent to their
medical condition.
The Internet site is attracting visitors who are more focused than the
average Internet user. The following statistics indicate that the visitors
represent a very targeted audience:
Visitors average age: 45 year old (Internet average 33 years old)
Visitors gender: 54% female (Internet average 31%)
94% of visitors are either a patient or an influencer of a patient:
76% Patient 18% Influencer 4% Doctor 2% Other
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70% of visitors have been diagnosed with a medical condition.
80% discuss the information with their doctor - creating value for
sponsors.
The Company intends to build relationships with strategic organizations
in the healthcare and information technology sectors. These organizations
would include healthcare providers -- like pharmaceutical firms, medical
service companies, specialized hospital departments, non-profit support
groups, and physician organizations -- as well as charitable research
foundations and publishers, HMOs, PBMs, pharmacies, clinical trial
organizations, allied health-care groups, and consumer media. These
relationships are expected to result in long-term partnerships. As of March
31, 1997, the Company had agreed with twelve non-profit patient associations
to provide their information on the Company's site. By the end of April 1997,
the Company intends to provide a "secure server" transaction area to allow the
non-profit associations a place to accept donations, and sell products and
services to users online. In return for promoting and processing the sales
the Company will charge the association a fee of approximately 10% of the
transaction amount.
Four examples of existing relationships best illustrate this strategy:
US TOO! is the largest Prostate Cancer Support Group in the world with
400 chapters representing over 120,000 patients. The Company hosts US TOO!
information on its site and works with US TOO! on joint marketing and
awareness ideas.
IBM Canada Ltd. has included their Internet Passport software with the
Company's marketing material sent to 1,400 pharmaceutical and healthcare
industry and media sources. Joint marketing ideas with IBM continue to be
discussed. In addition, IBM Canada Ltd. has agreed with the Company to
develop a marketing program and support tools for its Net.Commerce retail
software offering. The Mediconsult.com Internet Marketing Methodology[TM] and
the merchandising program for the Company's on-line medical store will be used
in this project.
Microsoft Canada, Inc. has engaged the Company to assist in developing a
detailed concept and implementation plan for a Canadian Health Channel on the
MSN Canadian Network.
Pharmaceutical Companies (e.g. Roche, Glaxo, Schering) have provided
consumer information in the Educational Material section on the Internet site.
The Company hosts workshops for pharmaceutical executives, consults with them
on a one-to-one basis, and prepares a regular newsletter specifically tailored
for the pharmaceutical industry.
COMPETITION
Management believes that there are over 7,500 medical and health
information sites on the Internet, and approximately 10 to 20 of these sites
are regularly managed and updated. Included among these Internet sites are
Intelihealth, a site developed jointly by Aetna U.S. Healthcare and Johns
Hopkins University; Medscape, operated by Medscape, Inc.; PharmInfoNet,
operated by VirSci Corporation; HealthAnswers, operated by Orbis Broadcast
Group; and sites operated by Mayo Clinic, Avicenna, Sapient Health Network,
Global Medic and HealthGate. Many of these competitors have significantly
greater financial, technical and marketing resources than the Company and some
have greater name recognition and client/patient bases.
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The Company attempts to compete by focusing on the needs of a patient
who has a particular illness or medical condition. Information on the
Company's site is organized into 50+ medical types so that a patient with a
particular illness or question can go immediately to the health problem he/she
is interested in. Most websites of competitors, on the other hand, are
designed to provide information for physicians or physicians and patients.
The Company attempts to provide the latest available information on the topics
it covers and new information is added daily. There can be no assurance that
the Company will be able to compete successfully against current and future
competitors.
GOVERNMENT REGULATION
The only portion of the Company's business which may be regulated is the
"Consult-Our-Specialist" service on the website. If the specialist were to be
deemed to be practicing medicine, he may be required to be licensed as a
physician in the jurisdiction where the user resides. The Company has
attempted to carefully design this portion of its business to avoid the claim
that it or its specialists are practicing medicine. The specialists only
provide general information in response to hypothetical questions. No medical
opinions or diagnoses are provided and no patient-specific recommendations are
made. The specialist always recommends that a user consult with his/her
physician. In the event that some state or other regulatory agency determines
that the Company or its specialists are practicing medicine without a license,
the Company will be required to revise or terminate this portion of its
business. The Company does not believe that this would have a material
adverse impact on its business because this is not expected to be a
significant source of revenue or profits for the Company.
EMPLOYEES
As of April 1, 1997, the Company had approximately 36 employees and
consultants of which 14 work full-time for the Company. The Company's
employees are not represented by any labor union. Management believes that
its relationship with its employees is favorable.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.
As of December 31, 1996, the Company had a negative working capital
position of $(58,811) and included in current liabilities are $500,000 of
convertible debentures which are due on December 31, 1997. The Company's
operations are currently being funded by loans from the Company's President.
Management believes that the Company will be able to continue to operate on
borrowings from the Company's President and other shareholders until such time
as the Company's revenue increases to a level where the Company has a positive
cash flow from operations. The Company is currently spending approximately
$125,000 to $150,000 per month and monthly revenues are less than $5,000 per
month. Among the expenses which the Company is committed to pay are the
salaries of Ian Sutcliffe ($20,000 per month), Michel Bazinet ($10,000 per
month) and certain other employees. The salary of Robert Jennings is variable
and depends on the amount of work he performs and the amount of cash
available. The Company is also committed to pay $5,500 per month to the
business which developed and operates the Company's website.
Management anticipates that revenues will increase to the level where
the Company almost has a positive cash flow by this summer, and if they do
not, Management intends to take steps to reduce its current level of
operations. There is no assurance that the revenues will increase to the
level necessary to avoid the need to borrow additional funds or that
additional funding will be available. Based on the above, Management believes
that the Company will have
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sufficient financing available to fund the Company's operations for the next
twelve months.
The Company has no current plans to purchase any significant equipment
or to conduct any significant research and development during the next 12
months. The Company also does not expect to make any significant changes in
the number of employees and consultants it uses unless it is necessary to make
cuts to reduce overall spending.
The Company intends to generate revenues in the following six ways:
1. MARKETING OR SPONSORSHIP FEES CHARGED TO PHARMACEUTICAL AND
MEDICAL SUPPLY COMPANIES. The Company believes that it will be able to
deliver to these companies a highly-motivated, interested and targeted
customer base and allow these companies an opportunity to display information
describing their products and services to this audience. As of March 31,
1997, the Company had one small pharmaceutical company which is paying to
advertise one of its drugs, and the Company is in discussions with a number of
other companies which are considering advertising their products on the
Company's site. There is no assurance how many, if any, of these companies
will decide to advertise on the Company's website.
2. FRANCHISING CONTENT. The Company has developed a significant
database of medical information for its website, and Management intends to
approach health maintenance organizations ("HMO's"), pharmaceutical firms,
pharmacy chains, and other companies in related fields and offer to license
the content on the Company's database. The Company intends to charge a
license fee on a per visitor basis.
3. ON-LINE SALES OF BOOKS AND MEDICAL SUPPLIES. The Company recently
entered into an agreement with Amazon.com, the largest bookseller on the
Internet, pursuant to which the Company refers users to the Amazon.com site
where users can buy books, tapes and videos. In return, Amazon.com pays the
Company a referral fee based on the sales price. By the end of April 1997,
the Company intends to offer, over its website, vitamins, CD-Roms and other
medical products and supplies.
4. USER FEES DERIVED FROM THE COMPANY'S "CONSULT-OUR-SPECIALIST"
SERVICE. This service currently provides a visitor to the site with
information based on the specific information submitted by the visitor, from
one of four prostate cancer specialists. The Company intends to add
specialists in other fields in the future. Each user will be charged a fee
for each inquiry. The fee is currently $200. The Company pays approximately
65% of this fee to the responding physician and keeps 35% of the fee.
5. CONSULTING SERVICES. In the course of building its business, the
Company has developed a comprehensive marketing strategy for doing business on
the Internet which the Company has labeled the "Mediconsult Internet Marketing
Methodology[TM]". Management has decided to consult with other companies
which would like assistance developing successful internet marketing
strategies. The Company has recently commenced consulting assignments with
IBM Canada Ltd., Microsoft Canada, Inc., and Hofman la Roche.
6. OFF-LINE NEWSLETTER SUBSCRIPTIONS PERTAINING TO SPECIFIC MEDICAL
CONDITIONS (E.G. A MONTHLY PROSTATE CANCER NEWSLETTER) WHICH WOULD BE
DISTRIBUTED THROUGH SUPPORT GROUP CHANNELS, MEDICAL SUPPLY AND PHARMACEUTICAL
COMPANY MARKETING PROGRAMS. The Company intends to commence this portion of
its business later in 1997.
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ITEM 3. DESCRIPTION OF PROPERTY.
The Company does not lease any office space. Its headquarters are
located in the offices of Robert Jennings, the President, and the Company pays
no rent for the use of the space. All of the Company's employees and
consultants work out of their homes or contractor's offices. The employees
and consultants make extensive use of Email, telephone and fax communications.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of April 1, 1997, each person known
by the Company to be the beneficial owner of five percent or more of the
Company's Common Stock, all Directors individually and all Directors and
Officers of the Company as a group. Except as noted, each person has sole
voting and investment power with respect to the shares shown.
<TABLE>
<CAPTION>
AMOUNT OF BENEFICIAL PERCENTAGE
NAME AND ADDRESS OWNERSHIP OF CLASS
- - ---------------- -------------------- ----------
<S> <C> <C>
Robert Jennings 5,540,000<FN1> 32.6%
33 Reid Street, 4th Floor
Hamilton HM 12
Bermuda
Michel Bazinet 6,000,000<FN2> 37.0%
343 Brookfield Street
Mount-Royal
Montreal, Quebec
Canada H3P 2A7
The Mediconsult Trust<FN3> 10,250,000 63.2%
51 Pitts Bay Road
Pembroke HM 12
Bermuda
Ian Sutcliffe 750,000<FN4> 4.6%
16 Stonehedge Hollow
Unionville, Ontario
Canada L3R 3Y9
Kevin Winter 1,570,000<FN5> 9.3%
4 Mill Point Lane
Pembroke HM05, Bermuda
All Executive Officers and 12,322,000<FN6> 72.5%
Directors as a Group
(5 Persons)
_________________
<FN>
<FN1>
Includes 4,750,000 shares owned beneficially by Mr. Jennings by virtue of his
46.342% beneficial interest in the shares held by The Mediconsult Trust, and
790,000 shares subject to immediately exercisable options granted under the
1996 Stock Option Plan.
<FN2>
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Includes 1,000,000 shares directly owned by Mr. Bazinet and 5,000,000 shares
owned beneficially by Mr. Bazinet by virtue of his 48.78% beneficial interest
in the shares held by The Mediconsult Trust.
<FN3>
The trustee of The Mediconsult Trust is Robert Jennings. The beneficiaries
and their respective beneficial interests are as follows: Robert Jennings
(46.342%); Michel Bazinet (48.78%); and Ian Sutcliffe (4.878%).
<FN4>
Includes 250,000 shares owned directly by Mr. Sutcliffe and 500,000 shares
owned beneficially by Mr. Sutcliffe by virtue of his 4.878% beneficial
interest in the shares held by The Mediconsult Trust.
<FN5>
Includes 970,000 shares held of record by Mr. Winter and 600,000 shares
underlying a $300,000 convertible debenture.
<FN6>
Includes presently exercisable options held by Mr. Jennings and Debora Falk.
</FN>
</TABLE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The Directors and Officers of the Company and its wholly-owned
subsidiary are as follows:
NAME AGE POSITIONS AND OFFICES HELD
---- --- --------------------------
Robert E. Jennings 39 President, CEO and Director of the Company
Ian Sutcliffe 44 Chief Operating Officer of the Company and
President of Subsidiary
Michel Bazinet 40 Medical Director of Subsidiary
Debora A. Falk 38 Vice President-Sales of Subsidiary
There is no family relationship between any Director or Executive
Officer of the Company.
The Company has no nominating, compensation or audit committees.
Set forth below are the names of all Directors, Nominees for Director
and Executive Officers of the Company and its wholly-owned subsidiary, all
positions and offices with the Company held by each such person, the period
during which he has served as such, and the principal occupations and
employment of such persons during at least the last five years:
ROBERT E. JENNINGS - PRESIDENT, CHIEF EXECUTIVE OFFICER AND A DIRECTOR
OF THE COMPANY. Mr. Jennings has served as President, CEO and a Director of
the Company since April 1996, and as CEO and a Director of Mediconsult.com
Limited since its inception in April 1996. Mr. Jennings received a Bachelors
Degree in Economics from the University of Western Ontario in 1979 and he
received his degree as a chartered accountant in Canada in 1981. He was
employed by Coopers & Lybrand in Canada and England from May 1979 until
September 1988, where he spent the last four years as a senior audit manager.
From September 1988 until February 1991, Mr. Jennings served as Vice President
of Arix Capital and Vice President-Finance of Arix Realty Group, a commercial
real estate company. From February 1991 until December 1993, he was a partner
in Bracknell & Associates,
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a company which advised clients on mergers and acquisitions, international
business, and other general business matters. Since January 1994, Mr.
Jennings has served as owner and President of Triathlon (Bermuda) Limited, a
company which provides international business advice. He also serves as a
director of MIT Ventures, Inc., a mining company which is publicly-traded on
the Vancouver Stock Exchange.
IAN SUTCLIFFE - CHIEF OPERATING OFFICER OF THE COMPANY AND PRESIDENT OF
SUBSIDIARY. Mr. Sutcliffe has served as Chief Operating Officer of the
Company and as President of Mediconsult.com Limited since July 1996. He has
17 years experience as a management consultant, primarily in the high-tech
sector. Most recently he spent three years from July 1993 to June 1996,
re-engineering key marketing and sales processes worldwide for IBM. Mr.
Sutcliffe received a Bachelor of Commerce Degree from the University of
British Columbia in 1980 and he received his Chartered Accountant Designation
in 1982. He was employed by Coopers & Lybrand in Canada and Europe from 1979
until 1985. He owned and operated his own firm, Sutcliffe & Associates, from
1985 until 1989 when he merged his firm with BDO Dunwoody. He left BDO
Dunwoody in June 1993 to begin his consulting work with IBM.
MICHEL BAZINET - MEDICAL DIRECTOR OF SUBSIDIARY. Dr. Bazinet has served
as the Medical Director of Mediconsult.com Limited since April 1996. He is a
urologist specializing in uro-oncology. He completed his medical and
specialty training at Sherbrooke (1979) and McGill (1984) universities in
Canada, followed by a three-year fellowship in uro-oncology at the Memorial
Sloan Kettering Cancer Center in New York. Dr. Bazinet has been practicing
medicine at McGill University in Montreal since 1987. His responsibilities
with the Company's subsidiary include the direction of the overall medical
content of the Company's website and he moderates many of the Company's
on-line support groups.
DEBORA FALK - VICE PRESIDENT-SALES OF SUBSIDIARY. Ms. Falk has served
as Vice President-Sales of Mediconsult.com Limited since September 1996.
During July and August 1996, she was a consultant to the Company. From 1985
until June 1996, she was employed by IBM Canada in a number of technical and
marketing positions with the most recent one being Canadian Market Management
Process Manager. She received a Bachelor of Arts degree in Computer Science
and Business from the University of Guelph in 1985.
The Company's executive officers hold office until the next annual
meeting of directors of the Company. There are no known arrangements or
understandings between any director or executive officer and any other person
pursuant to which any of the above-named executive officers or directors was
selected as an officer or director of the Company.
ITEM 6. EXECUTIVE COMPENSATION.
The following table sets forth information regarding the executive
compensation for the Company's President and each other executive officer
whose total annual salary and bonus exceeded $100,000 for the period from
April 23, 1996 through December 31, 1996:
-12-
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
(PERIOD FROM LONG-TERM
COMPENSATION
APRIL 23, 1996
- - -----------------------------------
TO DECEMBER 31, 1996) AWARDS
PAYOUTS
----------------------- ---------------------------
- - ------
SECURI-
TIES
UNDERLY-
OTHER RE- ING
ALL
ANNUAL STRICTED OPTIONS/
OTHER
NAME AND PRINCIPAL COMPEN- STOCK SARs LTIP
COMPEN-
POSITION YEAR SALARY BONUS SATION AWARD(S) (NUMBER) PAYOUTS
SATION
- - ------------------ ---- ------- ----- ------ -------- -------- -------
- - ------
<S> <C> <C> <C> <C> <C> <C> <C>
<C>
Robert Jennings, 1996 $55,000 -0- -0- -0- 790,000 -0-
-0-
President
Michel Bazinet, 1996 $150,000 -0- -0- -0- 250,000 -0-
-0-
Medical Director
of Subsidiary
Ian Sutcliffe, 1996 $120,000 -0- -0- -0- 250,000 -0-
-0-
President of
Subsidiary
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN PERIOD
FROM APRIL 23, 1996 THROUGH DECEMBER 31, 1996
AND SEPTEMBER 30, 1996 OPTION/SAR VALUES
SECURITIES UNDER- VALUE OF
UNEXER-
SHARES LYING UNEXERCISED CISED IN-THE
ACQUIRED OPTIONS MONEY OPTIONS/
ON SARs AT 12/31/96 SARs AT 12/31/96
EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (NUMBER) REALIZED UNEXERCISABLE UNEXERCISABLE
---- -------- -------- -------------- --------------
Robert Jennings -0- -0- 0 / 0 $1,753,800 / 0
Michel Bazinet 250,000 $123,750 0 / 0 $ 0 / 0
Ian Sutcliffe 250,000 $ 71,875 0 / 0 $ 0 / 0
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
(a) (b) (c) (d) (e)
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED(#) FISCAL YEAR ($/SH) DATE
---- ------------ ------------ ----------- ----------
Robert Jennings 790,000 53.4% $.025 4-24-98
-13-
<PAGE>
Michel Bazinet 250,000 16.9% $.025 4-24-98
Ian Sutcliffe 250,000 16.9% $.025 4-24-98
Following are the current monthly salaries of the three highest paid
officers of the Company and its wholly-owned subsidiary:
Robert Jennings - President of Company - <FN1>
Ian Sutcliffe - President of Subsidiary - $20,000 per month
Michel Bazinet - Medical Director of Subsidiary - $10,000 per month
______________
<FN1>
Mr. Jennings' salary is variable and depends upon the amount of work he
performs and the amount of cash available.
The Company has no employment agreements with any of its executive
officers.
DIRECTOR COMPENSATION
Directors of the Company do not receive any fees for their services in
such capacity. However, each Director is reimbursed for all reasonable and
necessary costs and expenses incurred as a result of being a Director of the
Company.
STOCK OPTION PLAN
In April 1996, the Company's Board of Directors adopted the Company's
1996 Stock Option Plan (the "1996 Plan"). The 1996 Plan was approved by the
Company's shareholders during May 1996. The 1996 Plan allows the Board to
grant stock options from time to time to employees, officers and directors of
the Company and consultants to the Company. The Board has the power to
determine at the time the option is granted whether the option will be an
Incentive Stock Option (an option which qualifies under Section 422 of the
Internal Revenue Code of 1986) or an option which is not an Incentive Stock
Option. However, Incentive Stock Options will only be granted to persons who
are employees of the Company. Vesting provisions are determined by the Board
at the time options are granted. As originally adopted, the total number of
shares of Common Stock subject to options under the 1996 Plan was not to
exceed 1,500,000, subject to adjustment in the event of certain recapitali-
zations, reorganizations and similar transactions.
The Board of Directors may amend the 1996 Plan at any time, provided
that the Board may not amend the 1996 Plan to materially increase the number
of shares available under the 1996 Plan, materially increase the benefits
accruing to Participants under the 1996 Plan, or materially change the
eligible class of employees without shareholder approval.
The following options have been granted to executive officers and other
employees of the Company and its subsidiary:
-14-
<PAGE>
NAME EXERCISE PRICE NUMBER OF SHARES
---- -------------- ----------------
Robert Jennings $.025 790,000
Michel Bazinet $.025 250,000
Ian Sutcliffe $.025 250,000
Debora Falk $.05 96,000
Other Employees $.025 & $.05 94,000
---------
Total 1,480,000
During October 1996, Messrs. Bazinet and Sutcliffe exercised all of
their stock options.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
ACQUISITION OF MEDICONSULT.COM LIMITED
On April 23, 1996, the Company issued 11,000,000 shares of its Common
Stock to the holders of 100% of the outstanding common stock of
Mediconsult.com Limited, a Bermuda corporation ("MCL"), in an exchange
transaction in which MCL became a wholly-owned subsidiary of the Company.
The stock issuances were made pursuant to an Agreement Concerning the
Exchange of Common Stock ("Agreement") between the Company and MCL. The terms
of the Agreement were the result of negotiations between the managements of
the Company and MCL. However, the Company's Board of Directors did not obtain
any independent "fairness" opinion or other evaluation regarding the terms of
the Agreement, due to the cost of obtaining such opinions or evaluations.
The persons receiving stock in this exchange were the following:
NAME NUMBER OF SHARES
---- ----------------
The Mediconsult Trust 10,250,000
Michel Bazinet 750,000
----------
Total 11,000,000
TRANSACTIONS INVOLVING THE COMPANY
During October 1996, the Company issued debentures in the aggregate
principal amount of $500,000 to four non-affiliated persons who had previously
loaned $500,000 to the Company's subsidiary. The debentures are convertible
into the Company's Common Stock at a conversion rate of $.50 per share. The
debentures bear interest at 8% and are due on December 31, 1997.
Since April 1996, Robert Jennings has advanced funds to the Company on
an interest-free basis. The outstanding balance of these advances was $51,841
on December 31, 1996 and $200,000 on March 31, 1997.
During December 1996, the Company sold 970,000 shares of its Common
Stock to Kevin Winter at $100 per share for a total consideration of $970,000.
TRANSACTIONS INVOLVING MEDICONSULT.COM LIMITED
Mediconsult.com Limited was incorporated under the laws of Bermuda on
April 11, 1996.
-15-
<PAGE>
On April 11, 1996, the corporation issued 12,000 shares to the
Mediconsult Trust for total consideration of $12,000.
The Board of Directors was of the opinion that the terms of the above
transactions were at least as favorable as those which could be obtained from
independent third parties.
ITEM 8. DESCRIPTION OF SECURITIES.
COMMON STOCK
The Company's Articles of Incorporation authorize the issuance of
50,000,000 shares of Common Stock, $.001 par value. Each record holder of
Common Stock is entitled to one vote for each share held on all matters
promptly submitted to the stockholders for their vote. Cumulative voting for
the election of directors is not permitted by the Articles of Incorporation.
Holders of outstanding shares of Common Stock are entitled to such
dividends as may be declared from time to time by the Board of Directors out
of legally available funds; and, in the event of liquidation, dissolution or
winding up of the affairs of the Company, holders are entitled to receive,
ratably, the net assets of the Company available to stockholders after
distribution is made to the preferred stockholders, if any, who are given
preferred rights upon liquidation. Holders of outstanding shares of Common
Stock are, and all unissued shares when offered and sold will be, duly
authorized, validly issued, fully paid, and nonassessable. To the extent that
additional shares of the Company's Common Stock are issued, the relative
interests of the existing stockholders may be diluted.
PREFERRED STOCK
The Company's Articles of Incorporation authorize the issuance of
5,000,000 shares of Preferred Stock, $.001 par value. The Board of Directors
of the Company is authorized to issue the Preferred Stock from time to time in
series and is further authorized to establish such series, to fix and
determine the variations in the relative rights and preferences as between
series, to fix voting rights, if any, for each series, and to allow for the
conversion of Preferred Stock into Common Stock. The issuance of any
Preferred Stock may have the effect of delaying, deferring or preventing a
change in control of the Company without further action by the shareholders
and may adversely affect the voting and other rights of the holders of the
Common Stock. At present, no Preferred Stock is issued or outstanding or
contemplated to be issued.
DIVIDENDS
No dividends have been paid by the Company on any of its securities in
the past and such dividends are not contemplated in the foreseeable future.
Dividends will be dependent directly on earnings of the Company, financial
needs, and other similar unpredictable factors and will be declared solely at
the discretion of the Board of Directors.
REPORTS TO INVESTORS
The Company intends to provide holders of its securities with annual
reports containing audited financial statements. The Company also will issue
quarterly or other interim reports to its stockholders as it deems
appropriate.
-16-
<PAGE>
TRANSFER AGENT
Standard Registrar & Transfer Agency, P.O. Box 14411, Albuquerque, New
Mexico 87111, serves as the transfer agent for the Common Stock of the
Company.
-17-
<PAGE>
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS.
The principal market for trading the Company's Common Stock has been the
over-the-counter market. Since September 30, 1996, prices for the Company's
Common Stock have been quoted on the OTC Bulletin Board under the trading
symbol "MCNS".
The range of high and low bid quotations for the Company's Common Stock
provided below were obtained from the OTC Bulletin Board. The bid prices
reported may not be indicative of the value of the Common Stock. The volume
of trading in the Company's Common Stock has been limited. The existence of
an active trading market may not exist at any given time and shareholders may
have difficulty selling their shares. These over-the-counter market
quotations reflect inter-dealer prices without retail markup, markdown or
commissions and may not necessarily represent actual transactions.
Bid
---------------
Quarters Low High
-------- ---- ----
December 31, 1996 $ .625 $2.37
March 31, 1997 $1.52 $2.25
As of April 1, 1997, there were 51 record holders of the Company's
Common Stock. Based on securities position listings, the Company believes
that there are at least 200 beneficial owners of the Company's Common Stock.
The Company has paid no cash dividends on its Common Stock and has no
present intention of paying cash dividends in the foreseeable future. It is
the present policy of the Board of Directors to retain all earnings to provide
for the growth of the Company. Payment of cash dividends in the future will
depend, among other things, upon the Company's future earnings, requirements
for capital improvements and financial condition.
ITEM 2. LEGAL PROCEEDINGS.
There is no litigation pending or threatened by or against the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
The Company has not changed accountants since its formation and there
are no disagreements with the Company's accountants concerning accounting and
financial disclosure.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
During its past three fiscal years, the Company issued securities which
were not registered under the Securities Act of 1933, as amended (the "Act"),
as follows:
On April 23, 1996, the Registrant issued a total of 11,000,000 shares of
its common stock to the following two shareholders of Mediconsult.com Limited,
a Bermuda corporation ("MCL"), in exchange for their shares of MCL, on a pro
rata basis, in connection with the Company's acquisition of MCL:
-18-
<PAGE>
SHARES OF COMMON
NAME STOCK ISSUED
---- ----------------
The Mediconsult Trust 10,250,000
Michel Bazinet 750,000
----------
Total 11,000,000
Robert Jennings, the primary beneficiary of The Mediconsult Trust, is
President and a Director of the Company, and Michel Bazinet is Medical
Director of the Company's subsidiary. In connection with this transaction,
the Company relied on Section 4(2) of the Securities Act of 1933, as amended.
Each person had access to complete information concerning the Company by
virtue of his position with MCL and his participation in the transaction with
the Company. In addition, both persons were sophisticated and understood the
risk of their investment. The shares were offered for investment only and not
for the purpose of resale or distribution, and the transfer thereof was
appropriately restricted by the Registrant.
During May 1996, the Company issued a total of 1,039,400 shares to 30
investors in Colorado, Arizona and Nevada in an offering conducted pursuant to
Rule 504 of Regulation D for a total cash consideration of $25,985.
During October 1996, the Company issued debentures in the aggregate
amount of $500,000 to four investors who had previously loaned $500,000 to
MCL. These persons were Sheri Weichel ($100,000), Kevin Winter ($300,000),
I.I. Partners ($50,000) and Donald MacKenzie ($50,000). Each of these
investors is an accredited investor. With respect to the sale of these
debentures, the Company relied on Section 4(2) of the Securities Act of 1933,
as amended, and Rule 506 of Regulation D promulgated thereunder. The
appropriate restrictive legends were placed on the debentures.
During October 1996, Messrs. Bazinet and Sutcliffe, officers of the
Company's subsidiary, each exercised stock options to purchase 250,000 shares
of the Company's Common Stock for the total consideration of $6,250 each. In
connection with this transaction, the Company relied on Section 4(2) of the
Securities Act of 1933, as amended. Each person had access to complete
information concerning the Company by virtue of his position as an officer of
the Company's subsidiary. In addition, both persons were sophisticated and
understood the risk of their investment. The shares were offered for
investment only and not for the purpose of resale or distribution, and the
transfer thereof was appropriately restricted by the Registrant.
During December 1996, the Company issued 970,000 shares to Kevin Winter
for $970,000 in cash pursuant to the exemption provided by Rule 504 under
Regulation D. Kevin Winter is also an accredited investor.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware General Corporation Law (the "Code") permits the Company to
indemnify an officer or director who was or is a party or is threatened to be
made a party to any proceeding because of his or her position, if the officer
or director acted in good faith and in a manner he or she reasonably believed
to be in the best interests of the Company. The Code authorizes the Company
to advance expenses incurred in defending any such proceeding under certain
circumstances, and if the officer or director is successful on the merits, it
authorizes the Company to indemnify the officer or director against all
expenses, including
-19-
<PAGE>
attorneys' fees, incurred in connection with any such proceeding. The
Company's Bylaws and Certificate of Incorporation provide that the Company
shall indemnify its officers and directors in accordance with the Code.
The Code permits the Company to limit the personal liability of its
directors for monetary damages for breaches of fiduciary duty as a director,
except for breaches that involve the director's duty of loyalty, acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, acts involving unlawful dividends or stock
redemptions or transactions from which the director derived an improper
personal benefit. Article 10 of the Company's Certificate of Incorporation,
as amended, includes such a provision which limits the personal monetary
liability of its directors.
-20-
<PAGE>
PART F/S
FINANCIAL STATEMENTS. The following financial statements are filed as part of
this Registration Statement:
PAGE(S)
-------
Report of Independent Accountants............................... F-1
Consolidated Balance Sheet as of December 31, 1996 ............. F-2
Consolidated Statement of Loss and Deficit for the period
from April 23, 1996 to December 31, 1996 ....................... F-3
Consolidated Statement of Cash Flows for the period from
April 23, 1996 to December 31, 1996 ............................ F-4
Notes to Consolidated Financial Statements...................... F-5 - F-8
PART III
ITEM 1. INDEX TO EXHIBITS AND ITEM 2. DESCRIPTION OF EXHIBITS
EXHIBIT
NUMBER DESCRIPTION LOCATION
- - ------- ----------- --------
3.1 Articles of Incorporation Previously filed.
3.2 Bylaws Previously filed.
10.1 1996 Stock Option Plan Previously filed.
10.2 Agreement Concerning the Previously filed.
Exchange of Common Stock
Between the Company and
Mediconsult.com Ltd.
10.3 Articles of Merger with Previously filed.
Delaware Subsidiary
10.4 Worldwide Web Server Previously filed.
Agreement with TeleVisions,
Inc., and Amendment
21 Subsidiaries of the Small Previously filed.
Business Issuer
27.1 Financial Data Schedule - Previously filed.
September 30, 1996
27.2 Financial Data Schedule - Filed herewith electronically
December 31, 1996
-21-
<PAGE>
COOPERS Chartered Accountants Dorchester House
& LYBRAND 7 Church Street West
Hamilton, Bermuda HM 11
PO Box HM 1171
Hamilton Beach, Bermuda HM EX
Telephone (441) 295-2000
Fax (441) 295-1242 (Groups 1/2/3)
January 14, 1997
Independent Auditors' Report To The Shareholders Of
Mediconsult.com Inc.
We have audited the accompanying consolidated balance sheet of
Mediconsult.com Inc. as of December 31, 1996 and the related consolidated
statements of loss and deficit and cash flows for the period from April 23,
1996 to December 31, 1996. These consolidated financial statements are the
responsibility of the company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform an audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Mediconsult.com
Inc. as of December 31, 1996, and the consolidated results of its operations
and
its cash flows for the period from April 23, 1996 to December 31, 1996 in
conformity with accounting principles generally accepted in the United States
of
America.
/s/ Coopers & Lybrand
Chartered Accountants
F-1
<PAGE>
Mediconsult.com Inc.
Consolidated Balance Sheet
as of December 31, 1996
(Expressed in U.S. Dollars)
$
---------
Current Assets
Cash 393,130
Deferred medical content costs (note 3) 161,600
Total Current Assets 554,730
Fixed Assets (note 4) 205,298
Total assets 760,028
Current Liabilities
Accounts payable and accrued liabilities 39,033
Interest payable (note 5) 22,667
Advances from shareholder (note 6) 51,841
Notes payable (note 5) 500,000
Total Current Liabilities 613,541
Shareholders' Equity
Capital Stock (notes 7 and 9) 1,008,585
Deficit (862,098)
Total Shareholders' Equity 146,487
Total Liabilities and Shareholders' Equity 760,028
Signed on Behalf of the Board
/s/ Robert E. Jennings
- - -------------------------------- ------------------------------
Director Director
The accompanying notes are an integral part of these consolidated financial
statements.
F-2
<PAGE>
Mediconsult.com Inc.
Consolidated Statement of Loss and Deficit
For the Period From April 23, 1996 to December 31, 1996
(Expressed in U.S. Dollars)
$
---------
Revenues
Total Revenues 0
Expenses
Salaries (note 8) 548,424
Office 170,491
Travel 69,896
Legal 50,620
Total expenses 839,431
Net Operating Loss for the Period (839,431)
Interest expense (22,667)
Loss for the Period (862,098)
Per share loss applicable to
common stock (Note 11):
Net Loss (0.06)
Pro forma per share of common stock,
reflecting conversion (Note 11):
Net Loss (.05)
Deficit - Beginning of Period 0
Deficit - End of Period (862,098)
The accompanying notes are an integral part of these consolidated financial
statements.
F-3
<PAGE>
Mediconsult.com Inc.
Consolidated Statement of Cash Flows
For the Period From April 23, 1996 to December 31, 1996
(Expressed in U.S. Dollars)
$
---------
Operating Activities:
Loss for the period (862,098)
Adjustments to reconcile loss for the
period to net cash provided by operating
activities:
Deferred medical content costs (161,600)
Accounts payable and accrued liabilities 39,033
Interest payable 22,667
Net cash used in operating activities (961,998)
Investing Activity:
Fixed asset purchases (205,298)
Net cash used in investing activity (205,298)
Financing Activities:
Advances from shareholder 51,841
Issue of capital stock 1,008,585
Notes payable 500,000
Net cash provided by financing activities 1,560,426
Increase in Cash 393,130
Cash - Beginning of Period 0
Cash - End of Period 393,130
The accompanying notes are an integral part of these consolidated financial
statements.
F-4
<PAGE>
Mediconsult.com Inc.
Notes to Consolidated Financial Statements
For the Period From April 23, 1996 to December 31, 1996
(Expressed in U.S. Dollars)
1. OPERATIONS
Mediconsult.com Inc. ("the company") was incorporated in the United States of
America on October 31, 1989 under the name Waterford Capital, Inc. The company
did not trade and was effectively dormant. On April 23, 1996 the company
changed its name to Mediconsult.com Inc. On April 23, 1996 the company
purchased the entire share capital of Mediconsult.com Limited, a company
incorporated in Bermuda. The company is a holding company and these financial
statements cover the period from its purchase of Mediconsult.com Limited. On
December 4, 1996, through a merger with a Delaware Corporation with the same
name as the company, the company became a Delaware Corporation.
Mediconsult.com Limited has an internet web site located at
http://www.mediconsult.com which is designed to serve the consumer demand for
top-quality, comprehensive information on specific medical topics. The
company's target audience consists of patients who are dealing with medium and
long-term medical conditions and are looking for detailed information about
their illnesses, the latest treatments, drug-related and other therapies, and
the management of side effects.
The company trades on the NASD - OTC market as "MCNS".
2. SIGNIFICANT ACCOUNTING POLICIES
These consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America. The
following is a summary of the accounting policies considered to be
particularly significant:
(a) Revenues. Revenues from the web site operations are recorded on an
accrual basis to the extent that collection is reasonably assured. There have
been no revenues earned to date as the web site is currently operating with no
charge to customers. The company will commence generating revenue in the first
quarter of 1997.
(b) Depreciation. Depreciation of the company's fixed assets has been
computed on the straight-line method over the estimated useful lives of the
assets as indicated below:
Estimated
Property Useful Lives
Computer Hardware 2 years
Computer Programming 2 years
The company writes off fully depreciated assets from its books.
(c) Deferred medical content costs. Deferred medical content costs are
amortized over a period of 12 months.
F-5
<PAGE>
Mediconsult.com Inc.
Notes to Consolidated Financial Statements (Continued)
For th Period From April 23, 1996 to December 31, 1996
(Expressed in U.S. Dollars)
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
(d) Basis of consolidation. These consolidated financial statements
include the results of the company and its wholly-owned subsidiary,
Mediconsult.com Limited. All intercompany balances have been eliminated on
consolidation.
(e) Use of estimates. The preparation of financial statements in
conformity with generally accepted accounting principles 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 the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
3. DEFERRED MEDICAL CONTENT COSTS
Deferred medical content costs relate to payments made to individuals and
companies for writing the summaries of the medical journal articles and other
medical information which appear on the internet site. This information will
have a lasting benefit estimated to be one year in duration. These costs have
been deferred and will be amortized over twelve months during the period when
the company commences generating revenue in the first quarter of 1997.
4. FIXED ASSETS
Fixed assets comprise :
Accumulated Net Book
Cost Depreciation Value
$ $ $
------- ------------ --------
Computer Hardware 75,186 0 75,186
Computer Programming 130,112 0 130,112
205,298 0 205,298
Depreciation on fixed assets has been deferred, and will be charged when the
company's computer systems are fully operational, and the company begins to
derive economic benefit from them, expected to be the first quarter of 1997.
F-6
<PAGE>
Mediconsult.com Inc.
Notes to Consolidated Financial Staetments (Continued)
For the Period From April 23, 1996 to December 31, 1996
(Expressed in U.S. Dollars)
5. NOTES PAYABLE
The company entered into notes payable in the aggregate of $500,000. The
principal amounts due are repayable on December 31, 1997 together with
interest at a rate of 8% per annum. Accrued interest related to the notes
payable at December 31, 1996 is $22,667.
On October 25, 1996 the company offered the right to convert the principal
amount of the notes payable at any time prior to payment, at the option of the
holder, into common stock at a conversion price of $0.50 per share.
6. ADVANCES FROM SHAREHOLDER
Advances from shareholder are interest free and repayable on demand.
7. CAPITAL STOCK
On October 31, 1989, the date of incorporation, the authorized share capital
of the company was 700 million shares of no par value common stock, and 10
million shares of $0.10 par value preferred stock. On November 7, 1989, the
company issued 13,500 common shares for a total consideration of $100 in cash.
On April 23, 1996, 55,000 common shares were issued in exchange for the entire
share capital of Mediconsult.com Limited, the Bermuda corporation which had a
fair value of $Nil at that date. An additional 5,197 common shares were issued
on May 24, 1996 for $25,985 in total. On August 12, 1996 a 20 for 1 share
split took place, which resulted in an issued share capital of 1,473,940
common stock. On October 25, 1996 a 10 for 1 share split took place, which
resulted in an issued share capital of 14,739,400 common stock. On November
13, 1996 stock options over 500,000 common shares were exercised for $12,500
in total. On November 20, 1996, the company issued 970,000 common shares for
$970,000 in total.
At December 31, 1996 capital stock comprises:
$
__________
Authorized
Common stock - 700 million shares at no par value 0
Preferred stock - 10 million shares at a par value
of $0.10 each 1,000,000
Issued and outstanding
Common stock - 16,209,400 shares at no par value 1,008,585
Preferred stock - 0 shares at a par value of $0.10
each 0
1,008,585
F-7
<PAGE>
Mediconsult.com Inc.
Notes to Consolidated Financial Statements (Continued)
For the Period From April 23, 1996 to December 31, 1996
(Expressed in U.S. Dollars)
8. RELATED PARTY TRANSACTIONS
During the period salaries of $55,000, $150,000 and $120,000 were paid to R.
Jennings, M. Bazinet and I. Sutcliffe respectively who are shareholders in the
company.
9. STOCK OPTIONS
At December 31, 1996 exercisable stock options over 980,000 ordinary shares
were outstanding. Of this total, options over 800,000 ordinary shares had an
exercise price of $0.025, no vesting provisions, and a fair value of $Nil at
the date of grant. Of these 790,000 expire on April 24, 1998 and 10,000 expire
on May 6, 1998. The remaining options over 180,000 ordinary shares had an
exercise price of $0.05, a fair value of $Nil at the date of grant, expire on
October 24, 1998, and will be fully vested by December 31, 1997.
10. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions have been used to estimate the fair
value of each class of financial instruments for which it is practicable to
estimate that fair value.
Carrying value of cash, accounts payable and accrued liabilities, interest
payable, advances from shareholder and notes payable is a reasonable estimate
of fair value.
11. PER SHARE EARNINGS
Per share data are based on the average number of common shares outstanding
during the period.
The pro forma per share data are based on the assumption that the outstanding
notes payable were converted into common shares at the beginning of the period
at the conversion ratio in effect at December 31, 1996, reflecting the
1,000,000 shares issuable on conversion and eliminating the related interest
expense on the notes payable of $22,667. The pro forma per share data are
also based on the assumption that the stock options outstanding of 980,000
common shares were exercised at the beginning of the period at the conversion
ratio in effect at December 31, 1996. The pro forma per share data are also
based on the assumption that the stock options for 500,000 common shares
exercised during the period were exercised at the beginning of the period.
F-8
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned thereunto duly authorized.
MEDICONSULT.COM, INC.
By:/s/ Robert Jennings
Robert Jennings, President
Date: April 10, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet and consolidated statement of loss and deficit
found on pages F-2 and F-3 of the Company's Form 10SB, and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 393,130
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 554,730
<PP&E> 205,298
<DEPRECIATION> 0
<TOTAL-ASSETS> 760,028
<CURRENT-LIABILITIES> 613,541
<BONDS> 0
0
0
<COMMON> 1,008,585
<OTHER-SE> (248,557)
<TOTAL-LIABILITY-AND-EQUITY> 760,028
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 839,431
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (22,667)
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (862,098)
<EPS-PRIMARY> (.06)
<EPS-DILUTED> 0
</TABLE>
