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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10SB/A
AMENDMENT NO. 2
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
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(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 290,000 visits during the month of May 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 entered into an agreement with CompuServe
Incorporated ("CompuServe") whereby CompuServe has established on its internet
site links to the Company's site and the Company has created a referral area
on its website to refer users to CompuServe's site.
During April 1997, the Company entered into an agreement with IBM Canada
Ltd. which basically has two components. First, the Company is working 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 has been
working in a consulting capacity to assist IBM Canada in the development and
marketing of its Net.commerce software for small and medium sized companies.
The IBM Net.commerce software is a proprietary electronic commerce
software product sold by IBM Canada to companies wishing to establish an on-line
retail environment. The Company has completed most of its services under
this agreement with IBM Canada, and these services included assessing the
competition, identifying bugs in the software, reviewing the installation
process, reviewing the IBM website tools that support the product, reviewing
marketing plans, creating proposal templates for selling the product and
conducting presentations to IBM Canada marketing staff.
The Company charged IBM Canada based on the actual time spent at the
Company's standard daily rates for consulting services.
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.
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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
-- 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 verbally agreed 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
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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.
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
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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 just completed 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.
* Medical Supplies: This section was opened late in April
1997. Users are able to purchase hard to find medical products, devices and
services which are shipped for home delivery. The Company in essence has 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] and the Company believes that it can utilize this marketing
methodology as a basis for providing consulting services to other companies
that are interested in developing a strategy for marketing on the Internet.
These consulting services are to be distinguished from the services described
above under "History of MCL" which the Company performed for IBM Canada in
connection with its Net.commerce software.
The Company has commenced consulting assignments with both Hoffman
LaRoche and Microsoft Canada. With respect to Hoffman LaRoche ("Hoffman"),
Hoffman wants to market a specific series of drugs over the Internet. The
Company is using its marketing methodology to determine Hoffman's objectives,
the needs of its audience, the Internet tools appropriate to these objectives,
how the Internet program links to traditional marketing programs, and how to
measure the return on investment.
With respect to Microsoft Canada the Company is using the same marketing
methodology except that the objective is to develop a new Health and Wellness
section as part of Microsoft Canada's Network website. The Company is helping
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Microsoft Canada develop the section where users of the website can obtain
various health and wellness information.
The Company charges its consulting clients based on the actual amount of
time spent at the Company's standard daily rates for consulting services.
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 290,000 visits to its website during the month of May
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
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. During April 1997, the
Company established 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.
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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.
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. Based on the foregoing, the Company believes that the services
provided by its specialists do not constitute practicing medicine. 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
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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 paying $5,500 per month to TeleVisions, Inc.,
the business which developed and maintains the Company's website. The Company
is operating under an agreement with TeleVisions, Inc., which provides that
either party can terminate the agreement on 60 days notice. Therefore, the
Company is only legally obligated to pay this amount so long as neither party
has elected to terminate the agreement. The Company has no present intention
of terminating its agreement with TeleVisions, Inc.
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 sufficient financing available to fund the
Company's operations for the next twelve months.
The $500,000 of debentures which are currently outstanding are
convertible at $.50 per share, and management expects that these debentures
will be converted before they become due on December 31, 1997. If they are
not converted, the Company will most likely need to raise additional
financing, either debt or equity in order to pay off any debentures that are
not converted.
Since December 1996, the Company spent approximately $150,000 on
computer hardware and software which was financed with the proceeds of the
December 1996 private offering. 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:
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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 June 2, 1997,
the Company had one small pharmaceutical company and a vitamin company which
are paying to advertise several of their products, 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. For example, Microsoft Canada may want
to create a Health and Wellness area on its Microsoft Network using the
Company's database, but with Microsoft Canada's own logos and look and feel.
The Company would develop the Microsoft Canada interface to the Company's
database and then charge Microsoft Canada for every "hit" on the database that
comes from Microsoft Canada's service. The charges would include some
combination of the number of visitors to the database and the number of
documents each person looks at.
3. ON-LINE SALES OF BOOKS AND MEDICAL SUPPLIES. The Company recently
signed on as a participant in the Amazon.com Associates program. Amazon.com is
the largest bookseller on the Internet. The Amazon.com Associates Program
provides that 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. Under the Amazon.com Associates program,
Amazon.com agrees to ship the books and provide all customer services for
orders which are received through the links on the Company's internet site.
The Company has no formal agreement with Amazon.com. During April 1997, the
Company started 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 June 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 11,040,000<FN1> 64.9%
33 Reid Street, 4th Floor
Hamilton HM 12
Bermuda
Michel Bazinet 1,000,000<FN2> 6.2%
343 Brookfield Street
Mount-Royal
Montreal, Quebec
Canada H3P 2A7
The Mediconsult Trust<FN3> 10,250,000<FN4> 63.2%
51 Pitts Bay Road
Pembroke HM 12
Bermuda
Ian Sutcliffe 250,000<FN3> 1.5%
16 Stonehedge Hollow
Unionville, Ontario
Canada L3R 3Y9
Kevin Winter 1,570,000<FN6> 9.3%
4 Mill Point Lane
Pembroke HM05, Bermuda
All Executive Officers and 12,322,000<FN7> 72.5%
Directors as a Group
(5 Persons)
_________________
<FN>
<FN1>
Includes 10,250,000 shares owned beneficially by Mr. Jennings by virtue of his
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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Represents 1,000,000 shares directly owned by Mr. Bazinet. Does not include a
contingent indirect beneficial interest in The Mediconsult Trust which is
estimated by the Trustee to be approximately 48.78% of the shares held by The
Mediconsult Trust or 5,000,000 shares. The actual interest of Mr. Bazinet in
The Mediconsult Trust is subject to the total discretion of Robert Jennings,
the trustee of The Mediconsult Trust.
<FN3>
The trustee of The Mediconsult Trust is Robert Jennings, and as trustee Mr.
Jennings has full control of the voting rights of the Trust. Mr. Jennings
created the trust and originally contributed all assets to the trust. He has
total discretion in the management and operation of the trust including the
sale of trust assets and the allocation of the proceeds among beneficiaries.
He also has absolute power to change beneficiaries. This Trust is a personal
tax and estate planning trust and it has an indefinite term. The
beneficiaries and their estimated contingent beneficial interests are as
follows: Robert Jennings (46.342%); Michel Bazinet (48.78%); and Ian
Sutcliffe (4.878%).
<FN4>
The Mediconsult Trust has granted an option to a non-affiliated entity to
purchase up to 300,000 shares owned by the Mediconsult Trust. The option
expires June 1, 1999.
<FN5>
Represents 250,000 shares owned directly by Mr. Sutcliffe. Does not include a
contingent indirect beneficial interest in The Mediconsult Trust which is
estimated by the Trustee to be approximately 4.878% of the shares held by The
Mediconsult Trust or 500,000 shares. The actual interest of Mr. Sutcliffe in
The Mediconsult Trust is subject to the total discretion of Robert Jennings,
the trustee of The Mediconsult Trust.
<FN6>
Includes 970,000 shares held of record by Mr. Winter and 600,000 shares
underlying a $300,000 convertible debenture.
<FN7>
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:
-12-
<PAGE>
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, 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.
-13-
<PAGE>
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:
<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
-14-
<PAGE>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants
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
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:
<TABLE>
<CAPTION>
<S> <C>
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
______________
<FN>
<FN1>
Mr. Jennings' salary is variable and depends upon the amount of work he
performs and the amount of cash available. There is no formula to determine
how much Mr. Jennings will be paid, and the decision is made by Messrs.
Jennings, Sutcliffe and Bazinet. Mr. Jennings has not been paid any salary in
1997 and he doesn't expect to be paid any salary for at least the next several
months.
</FN>
</TABLE>
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
-15-
<PAGE>
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:
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.
-16-
<PAGE>
TRANSACTIONS INVOLVING MEDICONSULT.COM LIMITED
Mediconsult.com Limited was incorporated under the laws of Bermuda on
April 11, 1996.
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.
-17-
<PAGE>
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.
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.
-18-
<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:
-19-
<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
-20-
<PAGE>
Company to indemnify the officer or director against all expenses, including
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.
-21-
<PAGE>
PART F/S
FINANCIAL STATEMENTS. The following financial statements are filed as part of
this Registration Statement:
PAGE(S)
-------
Consolidated Balance Sheet as of March 31, 1997 (unaudited)..... F-1
Consolidated Statement of Loss and Deficit for the three
months ended March 31, 1997 (unaudited)......................... F-2
Consolidated Statement of Cash Flows for the three
months ended March 31, 1997 (unaudited)......................... F-3
Notes to Consolidated Financial Statements (unaudited).......... F-4
Report of Independent Accountants............................... F-5
Consolidated Balance Sheet as of December 31, 1996 ............. F-6
Consolidated Statement of Loss and Deficit for the period
from April 23, 1996 to December 31, 1996 ....................... F-7
Consolidated Statement of Cash Flows for the period from
April 23, 1996 to December 31, 1996 ............................ F-8
Notes to Consolidated Financial Statements...................... F-9 - F-12
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.
9.1 Declaration of Trust -- The
Mediconsult Trust Filed herewith electronically
10.1 1996 Stock Option Plan Previously filed.
10.2 Agreement Concerning the Exchange Previously filed.
of Common Stock Between the Com-
pany and Mediconsult.com Ltd.
10.3 Articles of Merger with Previously filed.
Delaware Subsidiary
10.4 Worldwide Web Server Agreement Previously filed.
with TeleVisions, Inc., and
Amendment
-22-
<PAGE>
10.5 Marketing Partnership Proposal Previously filed.
with Electric Entertainment re
Doctor on Call
10.6 Form of Consulting Agreement Previously filed.
with Physician Specialist
10.7 Agreement with IBM Canada Previously filed.
21 Subsidiaries of the Small Previously filed.
Business Issuer
27.1 Financial Data Schedule - Previously filed.
September 30, 1996
27.2 Financial Data Schedule - Previously filed.
December 31, 1996
27.3 Financial Data Schedule -
March 31, 1997 Filed herewith electronically.
-23-
<PAGE>
MEDICONSULT.COM, INC.
CONSOLIDATED BALANCE SHEET
As of March 31, 1997
CURRENT ASSETS
Cash $ 10,443
Deferred Medical Costs 121,200
-----------
TOTAL CURRENT ASSETS $ 131,643
FIXED ASSETS 261,473
-----------
TOTAL ASSETS $ 393,116
CURRENT LIABILITIES
Accounts Payable and Accrued
Liabilities $ 75,640
Interest Payable 32,667
Advances from Shareholders 310,000
Notes Payable 500,000
-----------
TOTAL CURRENT LIABILITIES $ 918,307
SHAREHOLDERS EQUITY
CAPITAL STOCK 1,008,585
DEFICIT (1,533,776)
-----------
TOTAL SHAREHOLDERS EQUITY (525,191)
-----------
TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY $ 393,116
-----------
F-1
<PAGE>
MEDICONSULT.COM, INC.
CONSOLIDATED STATEMENT OF LOSS AND DEFICIT
For the Three Months Ended March 31, 1997
REVENUES $ 16,078
EXPENSES
Salaries 244,900
Office 61,100
Travel 31,740
Legal 11,762
Medical content 191,789
Computer maintenance 58,711
Depreciation and amortization 77,753
-----------
TOTAL EXPENSES $ 677,755
-----------
NET OPERATING LOSS FOR THE PERIOD $ (661,678)
Interest expense (10,000)
-----------
LOSS FOR THE PERIOD (671,678)
DEFICIT - BEGINNING OF PERIOD (862,098)
-----------
DEFICIT - END OF PERIOD $(1,533,776)
-----------
F-2
<PAGE>
MEDICONSULT.COM, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Months Ended March 31, 1997
OPERATING ACTIVITIES
Loss for the period $ (671,678)
Adjustments to reconcile loss fo the period
to net cash provided by operating activities
Depreciation and amortization 77,753
Increase in accounts payable and
accrued liabilities 36,607
Interest expense 10,000
----------
NET CASH USED IN OPERATING ACTIVITIES $ (547,318)
----------
INVESTING ACTIVITIES
Fixed asset purchases (93,528)
----------
NET CASH USED IN INVESTING ACTIVITY $ (93,528)
----------
FINANCING ACTIVITIES
Advances from shareholder 258,159
----------
NET CASH PROVIDED BY FINANCING ACTIVITIES $ 258,159
----------
DECREASE IN CASH $ (382,687)
CASH-BEGINNING OF PERIOD $ 393,130
----------
CASH-END OF PERIOD $ 10,443
----------
F-3
<PAGE>
MEDICONSULT.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1.
The consolidated financial statements included herein have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures have been condensed
or omitted pursuant to such rules and regulations. In the opinion of
Management, all adjustments, which were of a normal recurring nature,
necessary to present fairly the consolidated financial position and results of
operations and cash flows for the period presented have been included. These
consolidated financial statements should be read in conjunction with the
financial statements and the notes thereto for the fiscal year ended December
31, 1996.
F-4
<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-5
<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-6
<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 (0.05)
Deficit - Beginning of Period 0
Deficit - End of Period (862,098)
The accompanying notes are an integral part of these consolidated financial
statements.
F-7
<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-8
<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-9
<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-10
<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-11
<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-12
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Amendment No. 2 to the
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: June 26, 1997
THIS DECLARATION OF TRUST is made the First day of April One thousand nine
hundred and ninety-six
BY ROBERT JENNINGS of 51 Pitts Bay Road, Pembroke, Bermuda (hereinafter called
"the Original Trustee"):
WHEREAS:
(a) It is intended to make provision for the members of the Specified
Class as herein defined in manner hereinafter appearing and with this
intention the sum of money specified in the First Schedule hereto is to be
held by the Original Trustee or other the trustee or trustees for the time
being hereof upon the trusts and with and subject to the powers and provisions
hereinafter contained;
(b) It is contemplated that further sums of money, investments or
other property may hereafter from time to time be paid or transferred to or
otherwise placed under the control of the trustee or trustees for the time
being hereof to be held upon the trusts of this Trust;
NOW THIS TRUST DEED WITNESSES as follows:
DEFINITIONS AND CONSTRUCTION
1. (1) In this Trust wherever the context so permits or requires, the
following definitions and rules of construction shall apply:
"beneficiary" means any member of the Specified Class;
"charity" means any trust, foundation, institution or other organisation
whatever established for exclusively charitable purposes under the proper law
of this Trust and "charities" bears a corresponding meaning;
"the Perpetuity Day" means the day on which shall expire the period of one
hundred years after the execution of this Trust which period (and no other)
shall be the perpetuity period applicable hereto;
"person" includes an individual, company, partnership, unincorporated
association or any other organisation or body and any person acting in a
fiduciary capacity;
"Proper Law of this Trust" means the law of the jurisdiction governing this
Trust as stipulated in sub-clause 18(1) hereof or as otherwise declared under
the provisions of sub-clause 18(3) hereof and the rights of all persons
hereunder and the construction and effect of each and every provision hereof
shall be subject to the applicable Proper Law;
"the Specified Class" has the meaning attributed to it in the Second Schedule
hereto;
"this Trust" means the trust established by this Deed;
"the Trustees" means the Original Trustee or other the trustee or trustees for
the time being of this Trust;
"the Trust Fund" means:
(a) the said sum of money specified in the First Schedule hereto;
(b) all further sums of money, investments or other property hereafter
paid or transferred by any other person to or so as to be under the control of
<PAGE>
the Trustees and which shall be accepted by them as additions to the Trust
Fund and of which a memorandum signed by the Trustees shall be conclusive
evidence;
(c) all income which shall in accordance with the provisions of this
Trust be accumulated by the Trustees and added to the capital of the Trust
Fund; and
(d) the money, investments and property from time to time representing
the said sum of money specified in the First Schedule hereto, the said
additions and accumulations or any part thereof respectively;
"the Vesting Day" means the Perpetuity Day or such earlier day as the Trustees
shall by writing under their hand declare to be the Vesting Day;
(2) Words in this deed denoting the singular shall include the plural
and vice versa and words denoting any gender shall include both of the other
genders;
(3) The headings (other than the Schedules) in this deed are inserted
for convenience of reference only and shall have no legal effect nor shall
they affect in any way the construction of any clause contained herein;
(4) For the purposes of this Trust and in the interpretation and
construction of each and every provision hereof any adopted or legitimated
person shall be treated as the child of his adoptive or legitimative parents
as the case may be and of no other person.
NAME OF TRUST
2. This Trust shall be known as "THE MEDICONSULT TRUST" or by such other
name as the Trustees may from time to time determine.
TRUST FOR SALE AND INVESTMENT
3. (1) THE Trustees shall stand possessed of any real property from time
to time comprised in the Trust Fund Upon Trust to sell the same with power to
postpone the sale thereof or of any part thereof for such period as they shall
in their absolute discretion think fit and shall stand possessed of all other
investments comprised in the Trust Fund Upon Trust in their absolute
discretion either to retain the same in the existing state thereof for such
period as they shall think fit or at any time to sell the same or any part
thereof;
(2) The Trustees shall hold the net proceeds of any sale of
investments comprised in the Trust Fund and all other moneys held or received
by them as capital moneys upon trust to invest the same at their discretion in
or upon any of the investments hereinafter authorised with power to vary or
transpose such investments for or into any others of a like nature.
POWER OF APPOINTMENT
4. The Trustees shall stand possessed of the Trust Fund and the income
thereof Upon Trust for all or such one or more exclusively of the other or
others of the Specified Class at such age or time or respective ages or times
and to such uses for such estate or estates (whether absolutely or otherwise)
and if more than one in such shares and with and subject to such terms,
limitations and charges and with and subject to such provisions for
maintenance, education or advancement or accumulation of income for any period
and for any purpose authorised by law or for forfeiture in the event of
bankruptcy or otherwise and with such trusts and powers (including if thought
fit discretionary trusts and powers of appointment over capital and income and
powers to apply both capital and income capable of
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<PAGE>
being exercised in favour of all or any of the Specified Class) exerciseable
at the discretion of the Trustees or of any other person and generally in such
manner as the Trustees shall without transgressing the rule against
perpetuities by any deed revocable or irrevocable executed before the Vesting
Day appoint PROVIDED ALWAYS that:
(1) no such appointment shall invalidate any payment or application of
capital or income previously made under the trusts or powers herein elsewhere
contained; and
(2) every appointment shall be made and every interest limited
thereunder shall vest in interest (if at all) not later than the Vesting Day
and no appointment shall be revoked later than the Vesting Day; and
(3) subject to any irrevocable appointment theretofore made by the
Trustees the Trustees shall have power wholly or in part to release the Trust
Fund from the power hereby conferred upon them as though such power were not
conferred in a fiduciary capacity.
POWER TO PAY OR APPLY CAPITAL AND INCOME
5. In default of and subject to any such appointment as aforesaid the
Trustees may until the Vesting Day pay transfer appropriate or and apply the
whole or any part of the capital or annual income of the Trust Fund to or for
the maintenance advancement education or otherwise for the benefit of all or
such one or more exclusively of the other or others of the Specified Class for
the time being in existence in such proportions and manner as the Trustees
shall in their absolute discretion and without being liable to account for the
same think fit and the Trustees shall until the Vesting Day accumulate the
whole or such part of the annual income of the Trust Fund as shall not have
been paid or applied as aforesaid by investing the same in or upon any of the
investments hereby authorised for the investment of trust moneys and hold the
same as an accretion to the capital of the Trust Fund for all purposes.
ULTIMATE TRUST
6. Subject to the foregoing the Trustees shall on the Vesting Day stand
possessed of the Trust Fund and the income thereof upon the trusts set forth
in the Third Schedule hereto.
GIFT OVER
7. In the event of the failure or determination of the trusts hereinbefore
contained or if the whole or any part of the capital or income of the Trust
Fund shall be otherwise undisposed of by such trusts the Trustee shall on the
Vesting Date hold the capital and income of the Trust Fund Upon Trust for such
charitable purposes or charities as the Trustees shall think fit failing which
for charity generally.
POWERS OF INVESTMENT
8. (1) Trust moneys to be invested under the trusts hereof may be
invested or otherwise applied on the security of or in the purchase or
acquisition of any real or personal, movable or immovable property, rights or
interests of whatever kind and wherever situated including any stocks, funds,
shares, bonds, securities, commodities (including precious metals) or other
investments of whatever nature and whether producing income or not and whether
involving liability or not, or on loan and with or without interest and with
or without security, to any person or any firm or body corporate anywhere in
the world
-3-
<PAGE>
(including loans to any beneficiary under this Trust) and the Trustees may
grant indulgence to or release any debtor, give and take guarantees with or
without consideration or "cause", enter into profit sharing agreements or
grant and take options with or without consideration or "cause" and accept
substitution of any security for other security or of one debtor for another
debtor, to the intent that the Trustees shall have the same unrestricted
powers of investment and using moneys and of transposing investments and
altering the user of moneys forming part of the Trust Fund as if they were a
sole absolute beneficial owner of the Trust Fund and for the purposes of this
clause the purchase or acquisition of any property whether real or personal,
movable or immovable (including chattels) for the beneficial occupation use or
enjoyment of any person beneficially interested under this Trust shall also
constitute investment PROVIDED THAT any land purchased or acquired by the
Trustees under the foregoing power shall where it is possible to do so be
conveyed or transferred to the Trustees or their nominees Upon Trust to sell
the same with power to postpone such sale or with such similar powers as
circumstances permit;
(2) Without prejudice to the generality of the foregoing the Trustees
shall have power to invest the whole or any part of such trust moneys in any
one or more type of assets, whether real or personal, including the shares or
debentures of any company whatsoever and wheresoever without the need for
diversification and without being liable for any loss occasioned thereby.
ADDITION TO AND EXCLUSION FROM SPECIFIED CLASS
9. (1) The Trustees shall have power exerciseable at their absolute
discretion by deed revocable not later than the Vesting Day or irrevocable to
declare that any person or class of persons shall be included as a member of
the Specified Class for the purposes of this Trust on the terms contained in
such deed; and
(2) The Trustees shall have power exerciseable at their absolute
discretion by deed revocable not later than the Vesting Day or irrevocable to
declare that any person or class of persons shall be excluded as a member the
Specified Class for the purposes of this Trust on the terms contained in such
deed.
TRANSFERS TO OTHER SETTLEMENTS
10. (1) Any power hereby or by law conferred on the Trustees to appoint
pay transfer appropriate or apply any capital or income of the Trust Fund to
or for the benefit of any member of the Specified Class may at the discretion
of the Trustees be validly exercised by paying or transferring the same to the
trustees of any trust or settlement (whether or not such trustees are resident
in Bermuda and whether or not the proper law of such trust or settlement is
the law of Bermuda) the provisions of which are in the opinion of the Trustees
for the benefit of such member of the Specified Class notwithstanding that
such member is only a discretionary object of such trust or settlement and
further notwithstanding that persons other than such member are or may become
entitled to, or to the income of, the money or other property paid or
transferred to such trust or settlement;
(2) The power hereby conferred shall not be exerciseable in a way
which would or might infringe the rule against perpetuities as applicable to
this Trust.
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<PAGE>
PAYMENTS ON BEHALF OF MINORS
11. The Trustees are authorised to make any payment or distribution for any
member of the Specified Class who is a minor by paying or transferring the
same to such minor's parent or guardian or some other person for the time
being having the care or custody of such minor upon the recipient undertaking
to apply the same for the benefit of the minor and the Trustees shall not be
under any obligation to see to the further application of the capital or
income so paid or transferred and the receipt of such trustees parent,
guardian or other person shall be a full, sufficient and complete discharge to
the Trustees.
ADMINISTRATIVE POWERS
12. In addition and without prejudice to the powers conferred on the
Trustees below or by law, the Trustees shall until the Vesting Day and during
such further period (if any) as the law shall allow hold the Trust Fund with
and subject to all the powers and provisions contained in Paragraph 4 of the
Schedule to The Trusts (Special Provisions Act) 1989 ("the Schedule") with the
intent that the entirety of Paragraph 4 of the Schedule be incorporated herein
by reference;
(a) Power to Delegate
The Trustees shall have the power to delegate to any person
(including any trustee hereof) at any time for any period and in any manner
and upon any terms whatever the execution or exercise of the trusts powers and
discretions (or any one or more of them) imposed or conferred on the Trustees
by this Trust or by law or otherwise without being liable for the acts or
defaults of any such delegate or any loss to the Trust Fund resulting
therefrom;
(b) Power to Self-Appoint
Any trustee hereof and in particular any corporate trustee and any
parent subsidiary or affiliate of such corporate trustee may be appointed by
the Trustees to undertake and transact any business or to do any act requiring
to be transacted or done in the execution of the trusts hereof and in
particular without prejudice to the generality of the foregoing in exercise by
the Trustees of the powers contained in (a) above and sub-paragraph (17) of
Paragraph 4 of the Schedule in any such event shall be entitled to charge and
be paid and to retain for its own account all usual professional and other
fees and commissions normally paid for such services including fees and
commissions shared with other agents;
(c) Power to Vary Administrative Powers
The Trustees shall have power at any time before the Vesting Day
at their absolute discretion by deed revocable before the Vesting Day or
irrevocable if they consider the same to be in the interests of the persons
beneficially interested hereunder to vary all or any of the administrative
powers and provisions contained in this Trust or to substitute therefor any
other powers or provisions of an administrative nature or to add thereto any
additional administrative powers and provisions.
TRUSTEES' POWER TO CHARGE
13. Any trustee hereof being a lawyer, accountant or other person or
corporation engaged in any profession or business shall be entitled to charge
and be paid all usual professional or other charges for business transacted,
time spent and services done by him or his firm or it in relation to the
trusts hereof
-5-
<PAGE>
including a fee for acting as such trustee, such fee in the case of a
corporate trustee to be in accordance with its scale of fees for the time
being in force.
EXERCISE OF TRUSTEES' DISCRETION
14. The Trustees shall exercise the discretions (each of which shall be
absolute) and powers vested in them as they shall think fit for the benefit of
any one or more of the members of the Specified Class and may exercise (or
refrain from exercising) any discretion or power for the benefit of any of
them without being obliged to consider the interests of the others. Every
decision or action of the Trustees, whether actually made or taken in writing
or implied from the acts of the Trustees shall be conclusive and binding on
all of the members of the Specified Class.
TRUSTEES' BOND AND INDEMNITY
15. (1) The Trustees shall not be required to give a bond or security for
the due and faithful administration of the Trust Fund or for the discharge of
the trusts hereby created;
(2) In the professed execution of the trusts and powers hereof no
trustee shall be liable for any loss to the Trust Fund arising by reason of
any improper investment made in good faith or for the negligence or fraud of
any agent employed by him or by any other trustee hereof although the
employment of such agent was not strictly necessary or expedient or by reason
of any mistake or omission made in good faith by any trustee hereof or by
reason of any other matter or thing except wilful and individual fraud or
wrong-doing on the part of the trustee who is sought to be made liable.
APPOINTMENT AND RETIREMENT OF TRUSTEES
16. (1) If any trustee hereof whether original additional or substituted
shall die or being a corporation shall be dissolved or shall give notice of
his desire to withdraw and be discharged from the trusts hereof under the
provisions of sub-clause (2) of this clause or shall refuse or become unfit to
act or shall be required to resign under the provisions of sub-clause (3)
hereof then the persons listed in order of priority in the Fourth Schedule
hereto may by deed appoint any person (whether resident within or without
Bermuda) to be a trustee hereof in place of the trustee so deceased dissolved
desiring to withdraw and be discharged refusing or becoming unfit to act or
being required to resign as aforesaid PROVIDED THAT the number of trustees
shall not be increased to beyond four;
(2) If any trustee hereof shall at any time desire to withdraw and be
discharged from the trusts hereof he may do so by notice in writing signed by
him (or in the case of a corporate trustee by any of its officer) served on
the person named in sub-clause (1) hereof and any co-trustee and upon the
expiry of thirty days from the posting or personal delivery of such notice the
trustee so doing shall cease to be a trustee hereof to all intents and
purposes except as to acts and deeds necessary for the proper vesting of the
Trust Fund in the continuing or new trustee or otherwise as the case may
require;
(3) The person named in sub-clause (1) hereof may at any time by
notice in writing require any trustee hereof to resign and thereupon such
trustee shall cease to be a trustee hereof to all intents and purposes except
as to acts and deeds necessary for the proper vesting of the Trust Fund in the
continuing or new trustee or otherwise as the case may require;
-6-
<PAGE>
(4) The person named in sub-clause (1) hereof may by deed appoint any
person (whether resident within or without Bermuda) to be an additional or new
trustee hereof subject however to the proviso contained in sub-clause (1)
hereof;
(5) Acts and deeds done or executed for the proper vesting of the
Trust Fund in new or additional trustees shall be done and executed by the
continuing or retiring trustees at the expense of the income or capital of the
Trust Fund PROVIDED ALWAYS that in the event of the retirement or removal of
any trustee hereunder such outgoing trustee shall be entitled to receive from
the new trustee and from the continuing trustees (if any) an indemnity against
any and all liabilities in respect of any debts or probate, succession, estate
or any other duties, impositions or taxes of whatever nature which are then or
may thereafter become payable out of the capital or income of the Trust Fund
and shall not be bound to do or execute any such acts or deeds as aforesaid
except upon his receipt of such indemnity;
(6) Any new or additional trustee appointed under the provisions
hereof or by a court of competent jurisdiction shall have such powers, rights
and benefits as to remuneration or otherwise at or prior to his appointment as
may be agreed in writing (in the case of a trustee appointed as hereinbefore
provided) between such new or additional trustee and the person making such
appointment or (in the case of a trustee appointed by a court) as the order
appointing such trustee may direct.
MAJORITY OF TRUSTEES TO GOVERN
17. The Trustees may adopt any rules and regulations which they may, from
time to time, deem proper to govern their own procedure. At any time when
there are more than two persons acting as the Trustees, all questions
requiring action by the Trustees shall be determined by a majority of the
Trustees for the time being in office, and the Trustees may act either by a
resolution passed by a majority thereof at a meeting duly held or by an
instrument in writing signed by a majority thereof, and any such decision or
act of a majority of the Trustees shall, for all purposes, be deemed the
decision or act of the Trustees. Every deed or instrument of every nature or
description executed by a majority of the Trustees for the time being in
office shall be as valid, effectual and binding as if executed by all.
PROPER LAW AND FORUM OF ADMINSTRATION
18. (1) Subject to the following provisions of this Clause, this Trust is
established under the laws of Bermuda and the construction and effect of this
Trust shall be subject to the jurisdiction of and construed in accordance with
the laws of Bermuda;
(2) Subject to the following provisions of this clause the courts of
Bermuda shall be the forum for the administration of this Trust;
(3) The Trustees may at any time and from time to time declare by deed
that the trusts powers and provisions hereof shall from the date of such
declaration take effect in accordance with the law of any other place in any
part of the world and as from the date of such declaration the law of the
country named therein shall be the law applicable to this Trust and the courts
in that country shall be the forum for the administration thereof but subject
to the powers conferred by this sub-clause and until any further declaration
is made thereunder PROVIDED THAT notwithstanding anything herein contained the
Trustees shall not exercise such power in a way which might directly or
indirectly result in this Trust becoming according to the law applicable
thereto illegal void or
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<PAGE>
voidable or which might change the membership of the Specified Class or other
beneficial interests hereunder;
(4) The Trustees shall have power (subject to the application (if any)
of the rule against perpetuities) to carry on the general administration of
this Trust in any jurisdiction in the world whether or not such jurisdiction
is for the time being the Proper Law of this Trust or the courts of such
jurisdiction are for the time being the forum for the administration of these
trusts and whether or not the Trustees or any of them are for the time being
resident or domiciled in or otherwise connected with such jurisdiction;
(5) The Trustees may at any time declare by deed that from the date of
such declaration the forum of administration of this Trust shall be the courts
of any jurisdiction in the world whether or not such courts are of the
jurisdiction which is for the time being the Proper Law of this Trust.
POWER TO MAKE CONSEQUENTIAL ALTERATIONS
19. So often as any declaration shall be made pursuant to the provisions of
Clause 18 the Trustees may at any time thereafter by deed make such
consequential alterations and additions to the trusts powers and provisions of
this Trust as the Trustees may consider necessary or desirable to ensure that
so far as may be possible the trusts powers and provisions of this Trust shall
(mutatis mutandis) be as valid and effective as they are under the laws of
Bermuda.
IRREVOCABLE TRUST
20. This Trust shall be irrevocable.
IN WITNESS WHEREOF this Trust has been executed the day and year first above
written.
SIGNED SEALED and DELIVERED )
by the said ROBERT JENNINGS in )
the presence of: )
Ed Tatem )
- ------------------------------------
-8-
<PAGE>
THE FIRST SCHEDULE ABOVE REFERRED TO
1April 1996 One gold wafer (US$17)
11 April 1996 12,000 shares of Mediconsult.com Limited
24 May 1996 Exchanged 12,000 shares of Mediconsult.com Limited for
51,250 shares (certificate #129) of Mediconsult.com Inc.
16 June, 1996 received 973,750 additional shares (certificate #159) of
Mediconsult.com Inc. as a consequence of share split
23 October, 1996 received 9,225,000 additional shares (certificate #192) of
Mediconsult.com Inc. as a consequence of share split
<PAGE>
THE SECOND SCHEDULE ABOVE REFERRED TO
In this Trust the expression "the Specified Class" shall subject to the
exercise of any powers conferred upon the Trustees by Clause 8 hereof mean the
following persons now living or hereafter born before the Vesting Day (that is
to say):
(a) Robert Jennings
(b) Michel Bazinet
(c) Ian Sutcliffe
<PAGE>
THE THIRD SCHEDULE ABOVE REFERRED TO
In default of and subject to the trusts and powers contained in Clauses 4 and
5 respectively of the above written Trust the Trustees shall on the Vesting
Day stand possessed of the Trust Fund and the income thereof upon trust for
such of the issue of any member of the Specified Class (their respective
executors administrators and assigns) as shall be living on the Vesting Day
and if more than one in equal shares per stirpes.
<PAGE>
THE FOURTH SCHEDULE ABOVE REFERRED TO
The following persons in the following order of priority may exercise the
power conferred by Clause 16(1) of this Trust:
(a) St George's Trust Company
(b) The Bank of Bermuda
<PAGE>
<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-1 and F-2 of the Company's Form 10SB, and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<CASH> 10,443
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 131,643
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 393,116
<CURRENT-LIABILITIES> (918,307)
<BONDS> 0
0
0
<COMMON> 1,008,585
<OTHER-SE> (1,533,776)
<TOTAL-LIABILITY-AND-EQUITY> 393,116
<SALES> 0
<TOTAL-REVENUES> 16,078
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 677,755
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,000
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (661,678)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
