As filed with the Securities and Exchange Commission on February 22, 2000
Registration No. 333-80475
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
POST-EFFECTIVE
AMENDMENT NO. 2
TO
FORM SB-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
------------------
DOCTORSURF.COM, INC.
(Exact name of registrant as specified in its charter)
Florida 7375 59-3569844
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
6925 112th Circle North, Suite 101
Largo, Florida 33773
(727) 441-8663
(Address, including zip code, and telephone number
including area code, of registrant's principal executive offices)
------------------------------
Dr. Rakesh K. Sharma
6925 112th Circle North, Suite 101
Largo, Florida 33773
(727) 441-8663
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------
Copies to:
Martin A. Traber
Marina A. Choundas
Steven W. Vazquez
Foley & Lardner
100 N. Tampa Street, Suite 2700
Tampa, Florida 33602
(813) 229-2300
Facsimile: (813) 221-4210
------------------------------
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the effective date of this registration statement.
------------------------------
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. |X|
- --------------------------------------------------------------------------------
The Registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.
- --------------------------------------------------------------------------------
<PAGE>
25,000,000 shares
DOCTORSURF.COM, INC.
common stock
DoctorSurf is offering 25,000,000 shares of common stock. We will not
receive any proceeds from this offering. We are distributing the shares at no
cost to doctors who become members on DoctorSurf's web site in exchange for
their providing us with biographical and other personal information. Each doctor
who subscribes in this offering will receive 100 shares of common stock. This
offering is not being underwritten.
The common stock is not listed on any national securities exchange or
the Nasdaq Stock Market, and no public market currently exists for it.
This investment involves risks. See "Risk Factors" beginning on page 2.
Price to public Proceeds to DoctorSurf
--------------- ----------------------
Per share................ $0.00 $0.00
Total.................... $0.00 $0.00
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined that
this prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
Prospectus dated February 22, 2000
<PAGE>
TABLE OF CONTENTS
Page
----
PROSPECTUS SUMMARY............................................................1
RISK FACTORS..................................................................2
RECENT DEVELOPMENTS...........................................................4
USE OF PROCEEDS...............................................................5
DIVIDEND POLICY...............................................................5
CAPITALIZATION................................................................6
MANAGEMENT'S PLAN OF OPERATION................................................7
BUSINESS.....................................................................12
MANAGEMENT...................................................................19
PRINCIPAL SHAREHOLDERS.......................................................22
RELATIONSHIPS AND RELATED TRANSACTIONS.......................................24
DESCRIPTION OF SECURITIES....................................................24
PLAN OF DISTRIBUTION.........................................................26
SHARES AVAILABLE FOR FUTURE SALE.............................................28
EXPERTS......................................................................28
LEGAL MATTERS................................................................28
HOW TO GET MORE INFORMATION..................................................28
BLUE SKY LEGENDS.............................................................29
FINANCIAL STATEMENTS........................................................F-1
<PAGE>
PROSPECTUS SUMMARY
DoctorSurf
We are a new company formed to launch a unique medical web site that is
designed by doctors for doctors. We are designing our web site to be a complete
Internet medical resource for doctors which will deliver scientific information,
educational programming, and a variety of professional and consumer services.
Our services will be targeted to doctors who have an interest in communicating
with their colleagues and obtaining up-to-date information relevant to their
practices. We use the term "doctors" to mean physicians and dentists. We plan to
complete all phases of our web site by the first quarter of 2000.
Our executive offices are located at 6925 112th Circle North, Suite
101, Largo, Florida 33773. Our telephone number is (727) 546-6473. Our web site
address is DoctorSurf.com. Information contained in our web site is not part of
this prospectus.
<TABLE>
<CAPTION>
The offering
<S> <C>
Common stock offered........................................ 25,000,000 shares. We are distributing 100
shares at no cost to each doctor who becomes
a member of our web site.
Common stock outstanding before offering.................... 25,750,000 shares
Common stock outstanding after offering, assuming all
offered shares are sold..................................... 50,750,000 shares
</TABLE>
Our shares will currently be offered in California, Georgia and
Louisiana.
We currently are not offering our shares in certain jurisdictions.
Those are Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware,
Florida, Guam, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine,
Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana,
Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North
Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode
Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia,
Washington, West Virginia, Wisconsin, and Wyoming.
<PAGE>
RISK FACTORS
An investment in the common stock involves certain risks. Before
investing in the shares, you should carefully consider the risks described below
and the other information included in this prospectus. If any of these risks
actually occur, our business and financial condition could be harmed and we
could possibly cease operations.
Because we have no operating history, we may not be able to successfully manage
our business or achieve profitability
We were formed in April 1999, and we have not yet generated any
revenue. We have devoted all of our efforts to organizing activities and
building our web site. Accordingly, we have no operating history on which you
can evaluate us and our prospects. We may not be able to successfully manage our
business to achieve or maintain profitability, and our prospects are subject to
the risks, expenses and uncertainties frequently encountered by companies in the
early stages of development in new and evolving markets for online services.
We will not receive any proceeds from this offering, and we may be unable to
raise additional capital in the future
We will not receive proceeds from this offering. Moreover, we currently
have no revenue and do not expect to have any revenue until our web site is
completed. We anticipate needing to raise additional funds through a private or
public offering of our securities to fully implement our marketing plans for our
web site and to hire additional personnel. We cannot be certain that additional
financing will be available on terms favorable to us, or at all. If adequate
funds are not available or are not available on acceptable terms, our ability to
fully implement our marketing plans, hire a sufficient number of personnel,
develop our brand, take advantage of unanticipated opportunities, and otherwise
respond to competitive pressures will be significantly limited.
Because our recent private placement may have violated the federal securities
laws, investors in that offering have the right to receive a refund of the
purchase price
We previously sold to a limited number of investors 750,000 shares of
our common stock at a price of $1 per share in a private placement that was not
registered under the federal securities laws. Because our private placement and
this offering may be treated as a single offering for federal securities law
purposes, the exemption from registration that we relied on for our private
placement may no longer be available. As a result, the private placement may
have violated federal securities laws. Because of that possibility, we have
offered to each investor in the private placement the right to resell their
shares to us and receive a refund of the price paid by them.
The resale right expires on August 25, 2000.
To date, no investor has accepted our offer to resell their shares to
us and receive a refund of their purchase price. However, if all investors in
the private placement accept our offer, we would be required to pay to them
$750,000. If this occurs, we cannot be certain that we will have sufficient
funds to repurchase the shares that we sold in the private placement.
2
<PAGE>
In addition, we may be subject to liability and fines or penalties under the
federal securities laws because the federal securities laws do not expressly
provide that liability is avoided because an offer is made to repurchase shares
sold in violation of those laws.
We anticipate future losses and might not become profitable
We anticipate that we will incur losses for the foreseeable future. We
will incur expenses in completing our web site and establishing our brand name.
We intend to enter into arrangements with strategic partners that will provide
service or content for our web site. These arrangements will require us to pay
royalties, license fees and other forms of payment. We cannot be certain that we
can achieve sufficient revenues in relation to our expenses to become
profitable. If we do become profitable, we cannot be certain that we can
maintain or increase our profitability.
If we do not attract enough doctor members, our advertising revenue will be
insufficient and we may have to cease operations
We expect to derive a portion of our revenues from advertising on our
web site. If we cannot attract a large doctor member base, we will not be able
to generate sufficient advertising revenue. In addition, because the Internet
advertising market is new and rapidly evolving, we cannot predict its
effectiveness as compared to traditional media advertising. As a result, demand
and market acceptance for Internet advertising is uncertain. We cannot be
certain that the market for Internet advertising will continue to emerge or
become sustainable. If the market for Internet advertising fails to develop or
develops more slowly than we expect, then our ability to generate advertising
revenue may be materially adversely affected and we may have to cease
operations.
We may not be able to continue as a going concern because we have suffered
losses from operations and have a large potential liability associated with our
private placement
We may be unable to operate as a going concern. Our independent
accountants have included a statement in their report on our financial
statements indicating that our financial statements have been prepared assuming
that we will continue as a going concern. We have suffered losses from
operations since our inception and have a potential liability of $750,000
associated with our private placement, which cause substantial doubt as to our
ability to continue as a going concern.
Our success depends on the services of Dr. Sharma and Mr. Taneja
Dr. Rakesh K. Sharma and Jugal K. Taneja originated the plan for
DoctorSurf, and we continue to be dependent on their efforts to complete the
development of the web site and to find advertisers and strategic partners.
Thus, the loss of the services of either Dr. Sharma or Mr. Taneja would delay
the establishment of our business. We do not have key man life insurance
covering the lives of Dr. Sharma or Mr. Taneja.
3
<PAGE>
Because we have limited resources, we may not be able to adapt to increased
usage of the Internet or new technological developments
The market for Internet products and services is characterized by rapid
technological developments, evolving industry standards, and frequent new
products and enhancements. If faster Internet access becomes more widely
available through cable modems or other technologies, we may be required to make
significant changes to the design and content of our web site to compete
effectively. We cannot be certain that we will have the resources to make these
changes.
Also, as the number of web pages and users increase, we will need to
modify the Internet infrastructure and our web site to accommodate increased
traffic on the web site that we maintain. If we cannot modify our computer
systems, we may experience system disruptions and slower response times.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements based on our
current expectations about our company and our industry. The terms "believe",
"intend", "plan", "may", "will", "expect", "should", "could", "estimate",
"anticipate", "possible", and similar terms identify forward-looking statements.
These forward-looking statements involve risks and uncertainties. Our actual
results could differ materially from those anticipated in these forward-looking
statements as a result of the factors described in the "Risk Factors" section
and elsewhere in this prospectus.
RECENT DEVELOPMENTS
On November 8, 1999, the Securities and Exchange Commission declared
effective our registration statement relating to this offering. This prospectus
is part of that registration statement. We generally are prohibited from making
any written offers relating to this offering other than offers made or
accompanied by this prospectus. In addition, the federal securities laws allow
only limited communications by an issuer after a registration statement has been
declared effective.
Following the effectiveness of our registration statement, we issued a
press release concerning this offering and articles concerning us and this
offering appeared in various national and local newspapers. The post-effective
publicity concerning us and this offering may have exceeded the permissible
limited communications and, thus, may have violated the federal securities laws.
For that reason, we have filed a post-effective amendment to our registration
statement. This prospectus has been updated to reflect developments that have
occurred since our original registration statement.
In August 1999, we completed the sale of 750,000 shares of its common
stock at a price of $1 per share. The shares were sold to a limited number of
investors in a private placement that was not registered under the federal
securities laws. For federal securities law purposes, however, the private
placement and this offering may be considered a single offering. If considered a
single offering, the exemption from registration that we relied on in
4
<PAGE>
making the private placement would not be available and the private placement
would not be exempt from registration under the federal securities laws. As a
result, the private placement may have violated federal securities laws. Because
of that possibility, we have offered to each investor in the private placement
the right to resell their shares to us and receive a refund of the price paid by
them of $1 per share.
The private placement investors' right to sell their shares to us began
on August 25, 1999 and will expire on August 25, 2000. To date, no investor has
accepted our offer to resell their shares and receive a refund of the purchase
price. If all purchasers in the private placement investors accept our offer, we
would be required to pay an aggregate of $750,000. If this occurs, we cannot be
certain that we will have sufficient funds to repurchase the shares that were
sold in the private placement.
In addition, we may be subject to liability, fines or penalties under
the federal securities laws, which do not expressly provide that liability is
avoided because an offer is made to repurchase shares sold in violation of those
laws. Thus, even if our offer is rejected by the investors in the private
placement, we may continue to have a contingent liability of $750,000 until
August 25, 2000.
The $750,000 that we raised in the private placement will not be
included as shareholders' equity on our balance sheet until August 25, 2000 or,
if earlier, when the purchasers in the private placement reject our offer to
resell their shares to us. In addition, to the extent that purchasers in the
private placement accept our offer to repurchase the shares, our capitalization
will be reduced.
USE OF PROCEEDS
We will not receive any proceeds from this offering. We are issuing 100
shares at no cost to each doctor who becomes a member on our web site in
exchange for providing us with biographical and other personal information.
DIVIDEND POLICY
We have never declared or paid dividends on our common stock and we do not
anticipate paying any cash dividends in the foreseeable future. We intend to
reinvest earnings, if any, in the development or expansion of our business. Our
board of directors will determine, in its sole discretion, whether to declare
any dividends on our common stock in the future after taking into account
various factors, including our financial condition, operating results, current
and anticipated cash needs and plans for expansion.
5
<PAGE>
CAPITALIZATION
The following table sets forth, at September 30, 1999:
o the actual capitalization of DoctorSurf;
o the pro forma capitalization of DoctorSurf reflecting DoctorSurf's
receipt of the subscription receivable; and
o DoctorSurf's capitalization as adjusted to give effect to the sale
by DoctorSurf of the 25,000,000 shares, at the offering price of
$0.00 per share.
This table should be read in conjunction with the consolidated
financial statements of DoctorSurf and related notes included elsewhere in this
prospectus.
<TABLE>
<CAPTION>
September 30, 1999
-------------------------------------------------------
Actual Pro Forma As Adjusted
<S> <C> <C> <C>
Current portion of long term obligation................................. $ 29,302 $ 29,302 $ 29,302
Long term obligations, net of current portion 40,001 40,001 40,001
Common stock subject to rescission offer;
750,000 shares issued and outstanding as of September 30, 1999, and
750,000 shares issued and outstanding as of completion of offering
750,000 750,000 750,000
Subscription receivable................................................. (45,000) (0) (0)
Stockholders' equity
Common stock, $ 0.01 value, 95,000,000 shares authorized; 25,000,000
shares issued and outstanding actual and pro forma; 50,000,000
shares issued and outstanding as adjusted.........................
250,000 250,000 500,000
Paid-in capital......................................................... 84,000 84,000 84,000
Deficit accumulated during development stage............................ (260,849) (260,849) (510,849)
---------- ---------- -----------
Total stockholders' equity.............................................. 73,151 73,151 73,151
Total capitalization.................................................... 847,454 892,454 892,454
========== ========== ===========
</TABLE>
DoctorSurf estimates the fair market value of the shares of common
stock offered in this offering to be $1 per share, and the shares will be
charged to operations as promotions cost at the time of their issuance.
6
<PAGE>
MANAGEMENT'S PLAN OF OPERATION
Overview
DoctorSurf is a development stage company that plans to develop a web
site for doctors that is dedicated to doctor education, communication and
information exchange. We were incorporated in April 1999 and have not begun to
offer services. Since our incorporation, we primarily have focused on organizing
activities and the development of our web site. Accordingly, we have not
generated any revenue. DoctorSurf plans to derive revenue primarily from the
following sources:
o advertising revenue from businesses that are interested in using
the DoctorSurf web site to advertise their services and products;
o fees paid by companies to post advertisements on our web site for
doctor members to participate in online surveys;
o fees paid by pharmaceutical research and drug manufacturing
companies to post advertisements on our web site for doctor
members to participate in online clinical drug trials;
o fees paid by doctor members participating in online surveys,
clinical drug trials, and continuing medical education courses
through our web site; and
o fees paid by attorneys to use our web site to obtain expert
witnesses.
DoctorSurf plans to build a subscriber base by offering the following
services to each doctor who logs onto the DoctorSurf.com web site and registers
as a member by providing personal information:
0 Free e-mail- an e-mail account in the form of [email protected] upon
initial registration at the web site
0 Discussion forums - the ability to create and participate in web forums
that address a variety of medical issues, including new procedures and
insurance
0 Interactive chats- the choice of participating in real-time or delayed
discussions on various topics
0 Practice management - an online means to organize and manage patient
records, research diseases, and consult with legal advisers and
appointment, billing, and collection assistance and dictation services
0 Recruiting - online recruitment and job placement services for doctors
0 Integrated bulletin boards - the opportunity to post comments on ongoing
discussions or on topics of interest, give feedback or propose a subject to
discuss
7
<PAGE>
0 Live video conferencing - participation in live video conferences with
their favorite speakers
0 Calendar & personal schedule - personal calendar and schedule to keep track
of important dates and events
0 Live medical procedures - the unique and exciting opportunity to watch live
medical procedures through state of the art Internet technology
0 Educational credits - the ability to earn continuing medical education
credits, or CME, through online courses and listings of upcoming medical
meetings
0 Medical library - access to comprehensive physician reference databases,
journals and directories
0 Medical news hyperlinks - web links to relevant medical news sites
0 Pearl of the day -fun and informational daily pearls of wisdom on a
variety of topics
0 Financial news hyperlinks - web links to sites providing stock quotes and
other financial information
0 Online purchases - an online store where doctors can purchase books and
medical supplies for their practices
0 Medical village - links to medical journals, medical schools, hospitals,
and health care organizations around the world.
0 Surveys and clinical research trials - the opportunity for doctors to
enroll in online surveys and clinical research trials
0 Concierge - the availability of a concierge to assist doctors in making
consumer purchases
0 Disease and wellness centers - pages containing information on disease
symptoms and treatments and on maintaining good health
0 Men's, women's, children's and seniors' health pages - pages containing
health information and tips
0 Doctor's web site - ability to create an individualized web site through
DoctorSurf.com
0 Personal emergency medical card - an identification card issued through
DoctorSurf that contains personal health and doctor information in case of
emergency
Some of the services offered by DoctorSurf will have general
application to doctors, and some will be targeted to medical specialties.
Members of the web site do not have to accept DoctorSurf's offer of free shares
in order to benefit from the web site's features. DoctorSurf plans to promote
the web site to doctors through traditional marketing approaches, including
attending medical conventions and placing advertisements in publications aimed
at doctors. Therefore, even if there is minimal interest in this offering of
free shares through the
8
<PAGE>
web site, DoctorSurf expects to be able to attract doctors to visit the web site
and become members through alternative methods.
The key factor in attracting advertising revenue is the size of
DoctorSurf's subscriber base. DoctorSurf will not enter into any agreements or
negotiations with advertisers until doctor members have subscribed to its web
site. When DoctorSurf begins to attract doctor members, DoctorSurf plans to
attract advertisers to its web site by demonstrating to those businesses that
DoctorSurf's web site receives a high amount of traffic from doctors. However,
the advertising revenue generated by DoctorSurf will be directly related to the
number of doctor members to DoctorSurf's web site. If DoctorSurf cannot attract
a sufficient number of doctor members, DoctorSurf's advertising revenue will be
insufficient, which could cause DoctorSurf to cease operations.
DoctorSurf plans to promote its doctor member base to pharmaceutical
research and drug manufacturing companies to attract companies to enroll doctors
in online surveys and clinical drug trials. Participating companies would pay a
fee to DoctorSurf to be able to post advertisements for the surveys and drug
trials on DoctorSurf's web site. Moreover, the companies would pay participating
doctor members for volunteering for the surveys and drug trials. DoctorSurf
would receive a portion of that payment from doctor members on DoctorSurf's web
site in exchange for their participation in the surveys and drug trials.
DoctorSurf will not enter into any agreements or negotiations with
companies to enroll doctors in online surveys and clinical drug trials until its
doctor member base is of sufficient size. DoctorSurf believes that a member base
of 10,000 doctors will be necessary to generate revenue from online surveys and
clinical drug trials. Once the doctor member base is established, marketing
expenses will be the sole cost incurred by DoctorSurf to generate revenues from
these sources. As DoctorSurf does not administer the surveys or the drug trials,
DoctorSurf is not subject to federal or state governmental regulation with
respect to these services. DoctorSurf may not be able to generate sufficient
revenue unless its doctor members agree to participate in online surveys and
clinical drug trials.
DoctorSurf plans to partner with universities, hospitals, professors
and doctors that are interested in providing online courses for continuing
medical education, or CME, and serve as the liaison between doctors that would
like to earn CME credits and those participating as CME providers. As DoctorSurf
would serve only as the medium by which doctors may obtain CME credits and would
not actually be the CME course provider, DoctorSurf would not have to be
licensed to provide CME courses through the web site.
DoctorSurf has entered into a technology agreement with Weblink
Communications, Inc., now known as Hydrogen Media, Inc., for consulting and
technology services related to its web site for a lump-sum fee of $14,450 plus a
monthly maintenance fee of $359 for co-hosting and maintaining the web site.
Under the agreement, Weblink Communications, Inc. has created a "coming soon"
page and an e-mail solution for the web site. DoctorSurf's chief technology
officer and the other technology personnel we plan to hire will work to develop
and launch a customized, interactive web site.
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<PAGE>
DoctorSurf's ongoing costs and expenses include the monthly fee charged
by Weblink Communications to host and update our web site and salaries to our
technology and administrative personnel. Future costs and expenses will include
sales and marketing expenses incurred to acquire additional subscribers on the
web site.
Liquidity and capital resources
DoctorSurf believes that it has sufficient capital to complete the
creation of its web site and fund operations for at least the next 12 months.
DoctorSurf does not believe, however, that it will have sufficient capital to
fully develop and implement its marketing plan for the web site.
As a result, DoctorSurf believes that without the additional funds it
would take a longer period of time to establish an awareness of the
DoctorSurf.com brand and attract a large member base of doctors. Therefore,
DoctorSurf anticipates needing to raise $10 to $20 million through a future
private placement of equity or convertible debt securities within the next
twelve months. DoctorSurf has no specific plans relating to raising these funds
and has had only preliminary discussions with entities that might assist
DoctorSurf in raising these funds. There can be no assurance that DoctorSurf
will be able to raise additional funds in amounts or on terms acceptable to
DoctorSurf, if at all. If all of the 25 million shares are not issued within 12
months, DoctorSurf will not terminate this offering before raising additional
funds.
DoctorSurf's financial statements have been prepared assuming that it
will continue as a going concern. DoctorSurf's losses from operations since its
inception and its $750,000 potential liability associated with its private
placement raise substantial doubt as to its ability to continue as a going
concern. To date, no investor in DoctorSurf's private placement has accepted the
offer to resell their shares and receive a refund of their purchase price.
However, if all of DoctorSurf's private placement investors accept the offer to
resell their shares, DoctorSurf may have to obtain financing for the $750,000 to
be refunded to the private placement investors. Even if no private placement
investor requests a refund of their purchase price, DoctorSurf will need to
raise additional capital to fund operations. There can be no assurance that
additional financing will be available on terms acceptable to DoctorSurf, if at
all.
If we raise additional funds by issuing equity securities or debt
securities that are convertible into equity securities, the percentage ownership
of our shareholders will be reduced and those securities may have rights and
preferences that are senior to the common stock.
The expected aggregate salary to employees is $50,000 per month.
Year 2000
Many existing computer programs use only two digits to identify a year.
These programs were developed without addressing the impact of the upcoming
change in the century. If not corrected, many computer software applications
could fail or create erroneous
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results by, at or beyond the year 2000. We use software, computer technology and
other services internally developed and provided by third-party vendors that may
fail because of the year 2000 phenomenon. We are also dependent on telecommuni-
cations vendors to maintain our communications network.
Since our inception, we have internally developed substantially all of
the systems for the operation of our web site. Based upon our assessment to
date, we believe that our internally developed proprietary software is year 2000
compliant, but we cannot assure you that unanticipated year 2000 problems will
not occur.
We also believe that our third-party supplied software and computer
technology is year 2000 compliant. All of our software and computer technology
supplied by third-party vendors was purchased recently. In connection with these
purchases, our vendors represented that each of the technology products was year
2000 compliant. Nonetheless, the failure of any software or systems upon which
we rely to be year 2000 compliant could have a material negative impact on the
operation of our web site.
To date, we have not incurred any costs in connection with the year
2000 and we have not experienced any year 2000 problems. Based upon our
assessment of our software and computer technology, we do not believe that we
need to develop a year 2000 contingency plan. Moreover, the portion of our web
site that will depend on services provided by third parties will not be
operational until after January 1, 2000. That portion includes access to live
medical procedures, continuing medical education courses and medical library and
news material. Thus, we do not believe that we need a contingency plan with
respect to these services. However, the failure of any of our third-party
service providers to be year 2000 compliant could delay the offering of certain
services to our members.
The year 2000 readiness of the general system necessary to support our
operations is difficult to assess. For instance, we depend on the integrity and
stability of the Internet to provide our services. We also depend on the year
2000 compliance of the computer systems used by our members. Thus, the system
necessary to support our operations consists of a network of computers and
telecommunications systems located throughout the world and operated by numerous
unrelated entities and individuals, none of which has the ability to control or
manage the potential year 2000 issues that may impact the entire system. It is
not possible to predict potential negative impact of year 2000 issues of these
systems.
Our worst-case year 2000 scenario would involve a major disruption in
access to the Internet, a failure of our systems and a failure in the systems of
our third-party service providers. This would result in the interruption of the
use of our web site by our members and potential new members and would delay the
implementation of our strategy.
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BUSINESS
General
DoctorSurf was incorporated in April 1999 to provide a premier Internet
web site for doctors that is dedicated to doctor education, communication and
information exchange using state of the art technology, security, doctor
authentication and a combination of Internet protocols. DoctorSurf plans to
complete all phases of its DoctorSurf.com web site by the first quarter of 2000.
Industry background
The Internet is a rapidly growing, exciting new means of communicating,
accessing information and engaging in commerce. Several factors have led to the
growth of the Internet, including the expanding use of personal computers in
many homes and businesses, easy and affordable accessibility to information,
technology developments permitting faster and user-friendly Internet
connections, and increased awareness of the Internet among consumer and business
users.
Medical information is one of the fastest growing areas of interest on
the Internet. Cyber Dialogue, an independent research company, predicted in late
1998 that 30 million people are expected to use the Internet for health and
medical content in the next two years, according to a November 5, 1998 article
in New Media Age magazine. Doctors who would like to obtain up-to-date
information relevant to their practices and communicate with their colleagues
can make use of the Internet to satisfy their information and communication
needs. DoctorSurf will offer a web site that meets those needs by providing
doctors fast and simple access to a variety of communications and information
functions.
Also, we believe that healthcare and pharmaceutical companies will have
an increasing interest in using online advertising to reach target groups that
reflect appealing and compatible demographics. According to a December 10, 1998
article in New Media Age magazine, Jupiter Communications, an independent
research company, predicts that expenditures for online health and medical
advertising will exceed $265 million by 2002. Overall, Jupiter Communications
predicts that by 2002, North American companies will spend $7.7 billion
advertising online, according to a March 15, 1999 article in Fortune magazine.
Our services
The schedule for completing our web site and beginning to offer
services is as follows:
o DoctorSurf has purchased computers, configured its internal
network, and installed its high-speed Internet telecommunications
line and server.
o DoctorSurf's "coming soon" page and online application are
available on its web site.
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o DoctorSurf has designed and programmed web site pages that contain
a brief description of the web site and a skeleton of all channels
to the web site.
o DoctorSurf has identified companies, universities, hospitals or
libraries that could provide resource material and content for the
web site, such as access to databases, medical procedures, and
continuing medical education courses.
o DoctorSurf plans to enter into negotiations and agreements with
those service and content partners that have been identified. In
addition, DoctorSurf plans to form a medical advisory board
composed of professors and deans of medical schools and doctors in
various specialties that will advise DoctorSurf about the web
site's content. To incorporate the content into the web site,
DoctorSurf will need to identify and purchase existing software
that is able to deliver the content on the web site or that
DoctorSurf can configure to deliver the content on the web site.
o DoctorSurf will then need to test the software programs to ensure
that they implement the intended design for the web site before
they are actually deployed.
o By the end of the first quarter of 2000, DoctorSurf plans to have
its web site completed with its initial service offerings.
DoctorSurf anticipates that these service offerings will include
free e-mail, discussion forums, interactive chats, continuing
medical education courses, calendar and personal schedule
features, medical library access, and medical news hyperlinks. New
features will be added as they are developed.
DoctorSurf estimates that the costs to develop the web site up to this phase
will be $650,000.
The primary focus of DoctorSurf's business is to provide an education
and communication forum for physicians that have an interest in sharing ideas
and information, discussing clinical cases and the latest techniques with their
colleagues, and participating in continuing medical education courses to obtain
required educational credits easily and conveniently. Through various national
marketing efforts, including promoting the site at medical conventions and expos
and advertising in periodicals aimed at the doctor community, we will encourage
doctors to visit the DoctorSurf.com web site and to experience and enjoy all of
the benefits the web site has to offer.
DoctorSurf will require each doctor member to provide his or her name,
credentials, medical license and/or Drug Enforcement Agency, or DEA number. To
become a member on the DoctorSurf web site and receive shares in this offering,
interested doctors must also provide their telephone number and indicate their
income level. The information provided by the doctors will be secured on the web
site through transfer encryption technology and a firewall server. DoctorSurf
may sell or rent the names on its subscriber list with the prior consent of each
member, although it does not expect that the revenue from that activity will be
substantial.
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Upon registration at the web site, the doctor's medical license and/or
DEA number will be matched electronically against the American Medical
Association's web site or similar sites to qualify the doctor for membership.
Once inside the web site, doctors who are members may participate in a wide
range of available features, from viewing clinical techniques to updating their
personal and professional calendars. The doctors who are members may participate
fully in the web site even if they do not wish to receive free shares.
The web site will permit doctors to quickly access comprehensive
physician reference databases, journals, directories and medical news hyperlinks
to help them in their practices. Doctors who are members will also be able to
earn continuing medical education credits and share experiences and exchange
information in a private environment with other doctor members through e-mail,
real-time discussions or message boards. Doctor members will also have access to
online practice management tools and recruitment and job placement services. In
addition, the web site will offer doctors an online store where doctors can
purchase books and medical supplies for their practices, as well as an online
concierge to assist doctors in making personal consumer purchases.
DoctorSurf's web site will permit interested persons who are not
doctors to access the site. Visitors to the web site who are not doctors will
have the option of completing an online member application and providing their
name, birth date, marital status, gender, and address. Regardless of whether or
not visitors provide their personal information to DoctorSurf, however, they
will have access only to the web site's medical library, medical news and
financial information hyperlinks, online store, personal concierge, health
pages, disease and wellness centers, and personal emergency medical card. They
will also be able to access their own doctor's web site, if the doctor has
created a web site page through DoctorSurf. In addition to having access to
those features, visitors who complete the online member application will also
have access to e-mail service through the web site. Visitors to the site that
are not doctors, however, will not be able to receive any shares in this
offering.
The services available to visitors are expected to be offered on the
web site by the end of the first quarter 2000, and we anticipate that the costs
incurred for those services will be the corresponding amount of the salaries of
our technology and marketing personnel that will develop these features on the
web site and negotiate agreements with libraries and news providers,
respectively.
Our strategy
Our strategy is to develop a large base of Internet subscribers who are
doctors through an attractive, user-friendly web site. The following are key
elements of our strategy:
o Create and implement a state-of-the art web site through our
contract with Weblink Communications and through use of our
technology personnel
o Sign up doctors to be members on the web site, through our
marketing efforts and through this offering for free shares
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o Enter into advertising arrangements with different businesses and
companies that are interested in advertising on our web site,
based on the number of DoctorSurf subscribers with high income
levels through the efforts of the marketing personnel we plan to
hire
o Continually upgrade our web site to add new medical information
and services to visitors and members
There is no established business model for the sale of our service
offerings over the Internet, and we may have to change our service offerings in
the future. A possibility exists that a market for our services will never
develop. If a market fails to develop or develops more slowly than expected, we
might incur more losses than expected and we might not become profitable.
To be successful, we must:
o attract a large membership base of doctors;
o increase awareness of our brand;
o develop and provide desirable services;
o continue to develop and upgrade our technology;
o establish strategic relationships with service and content
providers;
o build an operations structure to support our business; and
o attract and retain qualified personnel.
We cannot guarantee that we will achieve these goals. We also cannot
guarantee that doctors will accept our services as a replacement for traditional
sources of the services that we plan to offer. Market acceptance of our services
will depend on the continued growth in the use of the Internet in general and as
a source of administrative and communication services in particular. The failure
of our services to achieve market acceptance would prevent us from attracting a
large doctor member base and would adversely affect our revenue. DoctorSurf does
not intend to engage in related party transactions to generate revenue.
Key market
DoctorSurf's services are targeted to doctors who have an interest in
communicating with their colleagues and obtaining up-to-date information
relevant to their practices.
Brand name
DoctorSurf believes that establishing and maintaining the
DoctorSurf.com brand and its reputation will be an important aspect of its
effort to attract and expand its doctor member
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base and attract advertisers to its web site. To establish its brand name,
DoctorSurf must successfully market its web site and doctors must perceive that
DoctorSurf offers quality services. This might require that DoctorSurf spend
more on marketing than it anticipates. If DoctorSurf fails to adequately
establish its brand name, it will not be able attract a large doctor member
base. DoctorSurf believes that attracting 10,000 doctor members will be
necessary to generate revenues from online surveys and clinical drug trials. In
addition, the amount of DoctorSurf's advertising revenue will depend in part on
the size of our doctor member base.
DoctorSurf has obtained the domain name "DoctorSurf.com." DoctorSurf
cannot be certain that it will be able to register the "DoctorSurf.com" mark
with the United States Patent and Trademark Office. If DoctorSurf is required to
stop using the "DoctorSurf.com" mark after its web site is operating, current
and potential members could be confused and DoctorSurf's business could be
disrupted.
Third-party providers
DoctorSurf will depend on third-parties to provide almost all of the
services that it plans to offer to its members. These services include e-mail,
discussion forums, interactive chats, practice management services, integrated
bulletin boards, video conferencing, calendar and schedule, live medical
procedures, and continuing medical education courses. Interruption of these and
other services or the failure of these and other services to function properly
could result in a reduction of our doctor member base.
DoctorSurf also plans to enter into strategic partnerships with content
providers to provide content for our web site. If DoctorSurf is not able to
establish these strategic partnerships or if it is not able to deliver high
quality content, DoctorSurf may not be able to attract and establish a large
doctor member base for its web site.
Competition
Due to the rapid expansion of the Internet, the market for Internet
services and products is intensely competitive and rapidly changing. There are
no substantial barriers to entry in the Internet market, and DoctorSurf expects
that competition will continue to intensify. DoctorSurf will compete, directly
and indirectly, for subscribers, and advertisers with other online services or
web sites targeted to the healthcare industry generally, including mdadvice.com,
WebMD.com, Healtheon, Americasdoctor.com, Accesshealth.com and DrKoop.com.
DoctorSurf believes that the central factors for attracting and
retaining doctor subscribers are the depth, breadth and timeliness of services
and content, the ability of DoctorSurf.com to offer interesting and compelling
services and content, ease of use and name recognition. DoctorSurf believes that
the principal factors that will attract advertisers to DoctorSurf.com are the
number of doctor members for the web site, the aggregate traffic on the web
site, the demographics of the doctor subscribers and creativity in advertising
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<PAGE>
placement on the site. To be competitive, DoctorSurf will need to respond to
technological advances and emerging industry standards and practices on a timely
and cost-effective basis.
Many of DoctorSurf's current and potential competitors have greater
resources to devote to the development and promotion of their web sites in terms
of a longer operating history, greater financial, technical and marketing
resources, wider name recognition, and larger subscriber bases that in turn
generate a greater ability to attract subscribers and advertisers. There can be
no assurance that DoctorSurf will be able to compete successfully against
current and future competitors, or that competitive pressures faced by
DoctorSurf will not have a material adverse effect on its business, financial
condition and operating results.
Employees
As of the date of this prospectus, DoctorSurf has 13 employees, six of
which are part-time employees and seven of which are full-time employees. Dr.
Sharma, while serving as president of DoctorSurf, is devoting only part of his
time to that effort. He spends approximately 20 to 25 hours a week in day-to-day
management of DoctorSurf. Mr. Taneja also spends approximately 20 to 25 hours a
week in his capacity as vice-president and secretary. Drs. Kapil, Amin,
Choudhry, Puri and Averill spend approximately 8 to 10 hours a week in
management activities in their capacities as vice-presidents of DoctorSurf.
DoctorSurf's full-time employees consist of a chief executive officer,
a chief technology officer, three computer programmers, and two web site
designers. DoctorSurf expects its internal technology department to complete the
development of its web site, which was started by Weblink Communications. Before
employing an internal technology department, DoctorSurf outsourced its
technology projects through a contractual arrangement with Weblink
Communications, which created a "coming-soon" page and established e-mail
service on a server.
DoctorSurf is currently searching for additional management level
employees, including a chief financial officer.
Government regulation
DoctorSurf is currently not subject to direct government regulation
other than regulations that apply to businesses generally. Few laws currently
exist that specifically regulate communications or commerce over the Internet. A
number of proposals by federal and foreign governments may lead to laws or
regulations concerning various aspects of the Internet, including the collection
of personal information online. If the United States or foreign governments
adopt legislation protecting user privacy, that legislation could affect
DoctorSurf's ability to collect or use personal information.
The applicability to the Internet of existing laws is uncertain. If new
laws are adopted or existing laws are applied in an unforeseen manner, it may
decrease the use of the Internet, which would decrease the demand for our
services and increase our cost of doing business.
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Potential liability
DoctorSurf may be subject to third party claims for defamation,
negligence, copyright or trademark infringement or other theories based on the
nature and content of information supplied on its web site, either directly or
through third parties, including materials retrieved from a web site to which
DoctorSurf has established a link from its web site. These claims could result
in damages being assessed against DoctorSurf. In addition, DoctorSurf could
incur significant costs in investigating and defending against those types of
claims.
Security risks
DoctorSurf will rely on the Internet and will depend on the continuous,
reliable and secure operation of Internet servers and related hardware and
software. DoctorSurf's systems will be susceptible to outages and interruptions
due to fires, floods, power losses, telecommunications failures, break-ins, and
similar events. Also, the systems of DoctorSurf's third-party service and
content providers will be subject to similar risks. To the extent that
DoctorSurf's service is interrupted or its doctor members are inconvenienced,
DoctorSurf could suffer from a loss in advertising or a decreased doctor member
base. DoctorSurf does not expect to have full redundancy for all of our computer
systems and does not expect to maintain a back-up data facility.
DoctorSurf will retain confidential information in its database
concerning its members. Therefore, maintaining the security of our confidential
information is critical. Despite the implementation of security measures,
DoctorSurf's systems may be vulnerable to electronic break-ins, computer
viruses, programming errors or similar disruptive problems. A material security
breach could damage DoctorSurf's reputation or expose it to liability.
Properties
DoctorSurf leases approximately 1,800 square feet of office space for
our executive offices and our operations in Largo, Florida. The office are
located at facilities located at 6925 112th Circle North, Suite 101, Largo,
Florida, 33773. The lease expires on August 31, 2000 and is renewable by
DoctorSurf for an additional one-year term. The monthly lease payments are
$1,200.
Legal proceedings
DoctorSurf is not a party to any material legal proceedings.
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MANAGEMENT
Directors, executive officers and key employees
The directors, executive officers and key employees of DoctorSurf and
their ages and positions held with DoctorSurf are as follows:
Name Age Positions
- ---- --- ---------
George L. Stuart, Jr...................... 53 chief executive officer
Rakesh K. Sharma, M.D..................... 42 president and director
Jugal K. Taneja........................... 55 vice-president,
secretary and director
Sanjiv Kapil, M.D......................... 31 vice-president
Mahesh Amin, M.D.......................... 43 vice-president
Umesh Choudhry, M.D....................... 38 vice-president
R.S. Puri, M.D............................ 63 vice-president
Venkata Rao Emandi, M.D................... 58 vice-president
Francis J. Averill, M.D................... 41 vice-president
Martin A. Traber.......................... 53 director
John P. Seeman............................ 39 chief technology officer
Each of DoctorSurf's directors is elected for a one-year term at the
annual meeting of shareholders and serves until his or her successor is elected
and qualified, or until his or her earlier death, resignation, or removal.
DoctorSurf is not currently paying, and has no current plan to pay, any
compensation to directors for their service on the board.
George L. Stuart, Jr. has been DoctorSurf's full-time chief
executive officer since December 1, 1999. For the past two years Mr. Stuart was
vice-president and director of Leapfrog Smart Products, Inc., a high-technology
smart card development company in Orlando, Florida. He currently serves as a
director of that company. From 1995 to 1997 Mr. Stuart was a partner in
Stuart/Cloud Enterprises, a government relations, business development and
organizational consulting firm in Tallahassee, Florida. From 1991 to 1995, Mr.
Stuart served as the secretary/chief executive officer of the State of Florida's
Department of Business and Professional Regulation.
Dr. Rakesh K. Sharma is DoctorSurf's president and has served
on the board of directors since DoctorSurf's inception. For the last five years
he has been a cardiologist and
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has been a member of the medical staff of several hospitals in the Tampa Bay,
Florida area. Dr. Sharma has been on the board of directors of Dynamic Health
Products, Inc., a public Florida corporation that manufactures and packages
health products and nutritional supplements, since March 1999.
Jugal K. Taneja is a vice-president and secretary of
DoctorSurf and has served on the board of directors since DoctorSurf's
inception. From November 1991 until December 1998, Mr. Taneja served as the
chairman of the board and as chief executive officer of NuMED Home Health Care,
Inc., a provider of home health care services and contract staffing of health
care employees. He is currently a director of NuMED. From June 1993 until March
1998, he was also the chief executive officer of National Diagnostics, Inc., a
provider of medical diagnostic services. NuMED and National Diagnostics, Inc.,
are publicly traded companies. Mr. Taneja has also been the chairman of the
board of Nutriceuticals.com, Inc., a public company engaged in e-commerce, since
March 1997. In addition, Mr. Taneja is currently serving as the chairman of the
board of Dynamic Health Products, Inc., a public Florida corporation that
manufactures and packages health products and nutritional supplements. He has
held that position since Dynamic's inception in January 1998.
Dr. Sanjiv Kapil is a vice-president of DoctorSurf. Dr. Kapil
is a rheumatologist and for the last five years has been practicing in a multi-
specialty group at a clinic in the Tampa Bay, Florida area.
Dr. Mahesh Amin is a vice-president of DoctorSurf. Dr. Amin
is a cardiologist who has been in private practice in Clearwater, Florida for
the last five years.
Dr. Umesh Choudhry is a vice-president of DoctorSurf. During
the last five years, Dr. Choudhry was on the teaching staff at the University of
South Florida's medical school until April 1999 and is now practicing as a
gastroenterologist in Clearwater, Florida. Dr. Choudhry has served as the
president of Advanced Digestive Care, P.A., a Florida corporation formed for Dr.
Choudhry's medical practice, since June 1999.
Dr. R.S. Puri is a vice-president of DoctorSurf. For the last
five years, Dr. Puri has been a general practitioner with offices in Lakeland
and Winter Haven, Florida.
Dr. Venkata Rao Emandi is a vice-president of DoctorSurf.
During the past five years, Dr. Emandi has been an oncologist in private
practice in the Tampa Bay, Florida area.
Dr. Francis J. Averill is a vice-president of DoctorSurf.
During the past five years, Dr. Averill has worked as a pulmonologist at the
Diagnostic Clinic in Largo, Florida and currently is the director of the
intensive care unit at Largo Medical Center.
Martin A. Traber has served on the board of directors since
DoctorSurf's inception. He has been a partner in the law firm of Foley & Lardner
since August 1994. Prior to joining Foley & Lardner, Mr. Traber was a partner in
the law firm of Arter & Hadden were he served for 10 years on the firm's
management committee and was national chairman of the business and corporate
departments and of the marketing and business development
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committee. Mr. Traber has over 27 years of experience in corporate finance and
securities law.
John P. Seeman has been DoctorSurf's full-time chief
technology officer since August 1, 1999. Mr. Seeman was president of All World
Network, Inc., an Internet e-commerce development company, for the last five
years. Mr. Seeman has been a faculty member at the University of South Florida's
Information Science and Decision Systems department lecturing on object-oriented
design, database design and programming languages since 1988.
DoctorSurf has obtained directors' and officers' insurance.
Executive compensation
DoctorSurf's chief executive officer, George Stuart, will be paid an
annual salary of $125,000. DoctorSurf's chief technology officer, John Seeman,
will be paid an annual salary of $85,000. No compensation is currently paid to
the other officers of DoctorSurf.
Employment agreements
DoctorSurf plans to enter into an employment agreement with George
Stuart for his position as DoctorSurf's chief executive officer. DoctorSurf has
not entered into any employment agreements with any other of its employees.
Key-man life insurance arrangements
DoctorSurf has not obtained any key-man life insurance.
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PRINCIPAL SHAREHOLDERS
The following table sets forth information regarding beneficial
ownership of DoctorSurf's common stock:
o each person who is known to own beneficially more than 5% of the
outstanding shares of DoctorSurf's common stock,
o each of DoctorSurf's directors,
o each of DoctorSurf's officers, and
o all directors and executive officers of DoctorSurf as a group:
<TABLE>
<CAPTION>
Name and Address Number of shares Percentage
- ---------------- ---------------- ----------
<S> <C> <C>
Rakesh K. Sharma
1819 Alicia Way
Clearwater, FL 33764..................................... 5,000,000 19.42%
21st Century Health Care Fund
7270 Sawgrass Point Drive
Pinellas Park, FL 33782.................................. 2,500,000 9.71
Carnegie Capital Ltd.
7270 Sawgrass Point Drive
Pinellas Park, FL 33782.................................. 2,500,000 9.71
John Armbruster
665 Bay Esplanade #4
Clearwater, FL 33767..................................... 2,500,000 9.71
Brod Living Trust
1 Cedar Glen Drive
Blairstown, NJ 07825..................................... 2,500,000 9.71
Stephen M. Watters
6950 Bryan Dairy Road
Largo, FL 33777.......................................... 2,500,000 9.71
R.S. Puri
1209 Lakepoint Terrace
Lakeland, FL 33813....................................... 1,000,000 3.88
Mahesh Amin
1802 Nottingham Care
Clearwater, FL 33764..................................... 1,010,000 3.92
Sanjiv Kapil
207 S. Coolidge Avenue
Tampa, FL 33609.......................................... 1,000,000 3.88
Jugal K. Taneja
7270 Sawgrass Point Drive
Pinellas Park, FL 33782.................................. 5,900,000* 22.91*
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Umesh Choudhry
7920 Oliver Road
Largo, FL 33777.......................................... 500,000 1.94
Francis J. Averill
2140 Long Bow Lane
Clearwater, FL 33764...................................... 500,000 1.94
Venkata Rao Emandi
5723 West Shore Drive
New Port Richey, FL 34652................................. 70,000 .27
Martin A. Traber
Foley & Lardner
100 N. Tampa Street
Suite 2700
Tampa, FL 33602.......................................... 0 0
All current directors and officers as a group -
nine persons 14,980,000 58.18
</TABLE>
*Includes 900,000 shares owned directly and 5,000,000 shares owned by 21st
Century Health Care Fund and Carnegie Capital Ltd. Mr. Taneja is the beneficial
owner of the shares held by those two entities.
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RELATIONSHIPS AND RELATED TRANSACTIONS
General
We do not have a policy with regard to entering into transactions with
affiliates.
Facilities
DoctorSurf's operations previously were located at facilities located
at 6950 Bryan Dairy Rd., Largo, FL 33777, owned by Dynamic Health Products, Inc.
Jugal K. Taneja, who is a director and a vice-president of DoctorSurf, is the
beneficial owner of all of outstanding shares of common stock of that company.
Also, Dr. Sharma, who is a director and president of DoctorSurf, is on the board
of directors of that company. DoctorSurf shares its facilities with
Nutriceuticals.com., of which Mr. Taneja is chairman of the board of directors
and Stephen Watters is president. No rent will be charged for DoctorSurf's use
of those facilities during our initial development phase. DoctorSurf has moved
its operations to new office space located at 6925 112th Circle North, Suite
101, Largo, Florida, 33773.
Legal counsel
Our legal counsel is Foley & Lardner. Martin A. Traber is a partner at
Foley & Lardner, as well as a director on DoctorSurf's board of directors.
Transactions with promoters
Dr. Rakesh K. Sharma, Jugal K. Taneja, John Armbruster, Stephen
Watters, Albert T. Brod, and Lois N. Brod are promoters. Mr. Armbruster and Mr.
Watters each purchased 2,500,000 shares of common stock from DoctorSurf at a
price of $.01 per share. Albert T. Brod and Lois N. Brod are the principals of
the Brod Living Trust, which purchased 2,500,000 shares of common stock from
DoctorSurf at a price of $.01 per share.
Technology Agreement with Weblink Communications, Inc.
John Armbruster, a beneficial owner of 9.71% of the outstanding shares
of DoctorSurf's common stock, is the principal of Weblink Communications, Inc.
Stephen Watters, a beneficial owner of 9.71% of the outstanding shares of
DoctorSurf's common stock, is listed as the initial "control person" in the
technology agreement entered into between DoctorSurf and Weblink Communications,
Inc. His responsibilities in that regard extend only to serving as a contact
person for DoctorSurf in communications with Weblink.
DESCRIPTION OF SECURITIES
Description of capital stock
Our authorized capital stock consists of 95,000,000 shares of common
stock, par value $.01 per share, and 5,000,000 shares of preferred stock, par
value $.01 per share. The following is a description of our capital stock.
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Common stock
In May 1999 DoctorSurf issued 25,000,000 shares of common stock to
seventeen investors in a private placement exempt from registration under Rule
506 of Regulation D of the Securities Act of 1933. Also, in June through August
1999, DoctorSurf issued 750,000 shares in a private placement exempt from
registration under Rule 506 of Regulation D of the Securities Act of 1933. A
possibility exists that an exemption from registration was not available for the
shares of common stock that we sold in our private placement. Accordingly, we
have offered to each purchaser in the private placement the right to resell
their shares and receive a refund of the price paid by them of $1 per share.
See "Recent Developments".
The holders of common stock are entitled to one vote for each share
held of record on each matter submitted to a vote at a meeting of shareholders,
and except as provided by resolutions of DoctorSurf's board of directors
providing for the issuance of any class or series of preferred stock, the
exclusive voting power for all purposes is vested in the holders of common
stock.
Subject to the preferential rights of holders of preferred stock as
provided by resolutions of DoctorSurf's board of directors authorizing the
issuance of any class of preferred stock, holders of common stock are entitled
to receive their pro rata share, based upon the number of shares held by them,
of any dividends or other distributions as may be declared by the board of
directors. In the event of a liquidation, dissolution, or winding up of
DoctorSurf, holders of common stock are entitled to share ratably in all assets
remaining after the payment or provision of DoctorSurf's debts and other
liabilities and the liquidation preference of any outstanding preferred stock.
Holders of common stock have no preemptive rights and have no rights to convert
their common stock into any other securities. The outstanding shares of common
stock are, and the shares of common stock involved in this offering will be,
when issued, validly issued, fully paid and nonassessable.
If DoctorSurf distributes all of the shares of common stock being
offered in this offering, its current executive officers and directors will
beneficially own or have voting control over approximately 29.9% of the
outstanding common stock. Accordingly, these individuals, if they act as a
group, will have substantial influence over all matters requiring shareholder
approval, including the election of DoctorSurf's directors. Also, this
concentration of ownership may also have the effect of delaying, deterring or
preventing a change in control of DoctorSurf.
Because DoctorSurf's common stock is not listed on any securities
exchange or the Nasdaq Stock Market and does not have a trading price of at
least $5 per share, our common stock is subject to federal penny stock
regulations. As a result, the market liquidity for the shares being offered in
this offering could be adversely affected because these regulations require
broker-dealers to make a special suitability determination for the purchase and
to have received the purchaser's written consent to the transaction prior to
sale. This makes it more difficult administratively for broker-dealers to buy
and sell stock subject to the penny stock regulations on behalf of their
customers. As a result, it may be more difficult for a broker-dealer to sell the
shares purchased in this offering.
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<PAGE>
Also, no public trading market in the common stock exists, and
DoctorSurf cannot be certain that one will develop. If an active trading market
for the common stock does not develop, a purchaser of shares in this offering
may not be able to sell those shares and an increase in the value of the shares
is less likely.
Preferred stock
DoctorSurf's articles of incorporation authorize the board of directors
to provide by resolution for the issuance from time to time of up to 5,000,000
shares of preferred stock in one or more class or series, with any special
rights and preferences, including but not limited to dividend or liquidation
preferences, voting rights and redemption rights, anti-dilution rights or
conversion rights, as the board may specify.
If DoctorSurf were to issue preferred stock, that class of stock would
have the right to vote as a class on a merger or sale of assets of DoctorSurf.
Accordingly, the issuance of preferred stock could have the effect of delaying
or preventing a change in control of DoctorSurf, even if a change in control
were in the best interests of the common stock shareholders.
As of the date of this prospectus, the board of directors has not
authorized the issuance of any class or series of preferred stock and no shares
of preferred stock are issued or outstanding.
PLAN OF DISTRIBUTION
Dr. Rakesh Sharma will be responsible for distributing the shares
through our web site. The material steps that a potential investor must
complete in order to subscribe for our shares are as follows:
o A doctor who logs onto our web site will have the option of
becoming a "member" by completing an online application that asks
for personal information, including name, address, type of
practice and specialty, license and Drug Enforcement Agency, or
DEA, number, annual income, and personal interests.
o The online application will also have a box that permits a doctor
who is interested in receiving 100 free shares to click on that
box for more information. The box will contain a statement that a
registration statement has been filed with the SEC, and offer a
hyperlink to the final prospectus, which the doctor will be able
to download if he or she wishes. DoctorSurf will also make
available a paper copy of the final prospectus upon request
by a potential investor. The doctor has the option of then
confirming that he or she has received the prospectus and would
like to receive the free shares by clicking on another box. The
doctor must confirm that he or she has received the prospectus
before receiving shares.
o A doctor who is interested in receiving the free shares will also
be able to indicate his or her preference in the method of
receiving the shares: 1) by book entry recordation of the shares
through DoctorSurf's stock transfer agent, Continental
26
<PAGE>
Stock Transfer & Trust Company; or 2) by mailing a stock
certificate to the doctor through the stock transfer agent. A
small fee may be charged to doctors who choose to receive a stock
certificate.
o Once the doctor clicks on a box confirming that he or she has
received the prospectus and indicated a preference on how he or
she would like to receive the 100 free shares, we will verify the
information on that doctor's online application and notify the
doctor by e-mail within a short period of time whether his or her
subscription has been accepted. We will then either issue
uncertificated shares through book entries by our stock transfer
agent or mail a stock certificate evidencing ownership of the
shares to the doctor through our stock transfer agent. If
uncertificated shares are issued, we will send to the doctor a
written statement setting forth:
o our name;
o that we are organized under the laws of Florida;
o the name of the person to whom the shares are issued;
o the number and class of shares;
o the designations, relative rights, preferences and
limitations applicable to each class of stock and each
series of classes of stock;
o the authority of our board of directors to determine
variations for future series of classes of stock; and
o any restrictions on transfer of the shares.
All doctor members who complete the online application, receive the
prospectus, and indicate an interest in receiving our free shares will receive
100 shares. The doctors who elect to receive our free shares will not have any
post-subscription obligations.
No affiliates of DoctorSurf may subscribe for our shares, and we do not
have any plans or arrangements with anyone regarding the development of a
trading market of the common stock. If there is minimal interest in this
offering, we do not intend to open the offering to the general public. There are
approximately 80 holders of record for the common stock.
Our shares will currently be offered in California, Georgia and
Louisiana.
This is neither a solicitation to buy nor an offer to sell our shares
to persons in the following jurisdictions: Alabama, Alaska, Arizona, Arkansas,
Colorado, Connecticut, Delaware, Florida, Guam, Hawaii, Idaho, Illinois,
Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New
Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma,
Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota,
Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin,
and Wyoming. Persons in those jurisdictions cannot receive shares in this
offering.
27
<PAGE>
SHARES AVAILABLE FOR FUTURE SALE
Upon completion of this offering, DoctorSurf will have 50,750,000
shares of common stock outstanding, assuming all shares being offered are sold.
The 25,000,000 shares of common stock sold in the offering will be freely
tradable without restriction or further registration under the Securities Act.
The remaining approximately 25,750,000 shares of common stock will be
"restricted" securities within the meaning of Rule 144 of the Securities Act of
1933, and may not be sold in the absence of registration under the securities
laws unless an exemption from registration is available.
One of those exemptions is Rule 144. In general, Rule 144 allows a
shareholder who has beneficially owned restricted securities for at least one
year to sell within any three-month period a number of shares that does not
exceed the greater of 1% of the then outstanding shares of common stock or the
average weekly trading volume during the four calendar weeks preceding the sale.
Sales under Rule 144 also must be sold through brokers or "market makers" and
current public information regarding the company must be available. Shares
properly sold in reliance on Rule 144 to persons who are not affiliates of
DoctorSurf become freely tradable without restriction. Rule 144 also permits
sales by a person who has beneficially owned shares for at least two years and
who is not an affiliate of the company. DoctorSurf's affiliates are people that
directly or indirectly control DoctorSurf, are controlled by DoctorSurf, or are
under common control with DoctorSurf. For example, DoctorSurf's directors,
executive officers, and significant shareholders are affiliates.
EXPERTS
The financial statements of DoctorSurf.com, Inc., as of June 30, 1999,
and for the period from May 14, 1999 (date of inception) to June 30, 1999,
appearing in this prospectus have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report appearing herein and are
included in reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.
LEGAL MATTERS
The validity of the common stock offered in this offering will be
passed upon by Foley & Lardner. Martin A. Traber, a partner at Foley & Lardner,
also serves on DoctorSurf's board of directors.
HOW TO GET MORE INFORMATION
We have filed with the Securities and Exchange Commission a
registration statement on Form SB-2 under the Securities Act with respect to
this offering. This prospectus, which is part of the registration statement,
does not contain all of the information set forth in the registration statement
and its accompanying exhibits and schedules. For further information with
respect to DoctorSurf and the securities in this offering, please see the
registration statement and the accompanying exhibits and schedules.
28
<PAGE>
Statements contained in this prospectus as to the contents of any
agreement or any other document summarize only the material provisions of such
document and are not necessarily complete, and in each instance, reference is
made to the copy of the agreement or document filed as an exhibit to the
registration statement, with each statement being qualified in all respects by
their reference.
We will file annual, quarterly, and current reports, proxy statements,
and other documents with the Commission. You may read and copy any document that
we file with the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices at 7 World
Trade Center, New York, New York 10048, and Northwest Atrium Center, 500 West
Madison Street, Chicago, Illinois 60661. Copies of those materials may also be
obtained at prescribed rates from the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549. Our filings with the
Commission are also available from the Commission's web site at
http://www.sec.gov.
BLUE SKY LEGENDS
To California investors only: DoctorSurf's offering was registered with
the California Department of Corporations pursuant to a limited offering
qualification. This limited offering qualification requires California investors
to meet a "super suitability" standard of one of the following:
o not less than $250,000 liquid net worth (a net worth exclusive of
home, home furnishings and automobiles), plus $65,000 gross annual
income; or
o $500,000 liquid net worth; or
o $1,000,000 net worth (inclusive of home, home furnishings and
automobiles); or
o $200,000 gross annual income
In addition, the exemption for secondary trading available under
Corporations Code Section 25104(h) will be withheld from California purchasers,
but there may be other exemptions to cover private sales by the bona fide owner
for his or her own account without advertising and without being effected by or
through a broker-dealer in a public offering.
29
<PAGE>
DoctorSurf.com, Inc.
(A Development Stage Company)
Financial Statements
as of June 30, 1999 and for the Period from
May 14, 1999 (date of inception) to June 30, 1999
and Independent Auditors' Report
F-1
<PAGE>
DOCTORSURF.COM, INC.
(A Development stage company)
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Page
INDEPENDENT AUDITORS' REPORT F-3
FINANCIAL STATEMENTS AS OF JUNE 30, 1999 AND FOR THE PERIOD
FROM MAY 14, 1999 (DATE OF INCEPTION) TO JUNE 30, 1999:
Balance Sheet F-4
Statement of Operations F-5
Statement of Stockholders' Equity F-6
Statement of Cash Flows F-7
Notes to Financial Statements F-8
F-2
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
DoctorSurf.com, Inc.:
We have audited the accompanying balance sheet of
DoctorSurf.com, Inc. (a development stage company) (the "Company") as of June
30, 1999, and the related statements of operations, stockholders' equity and
cash flows for the period from May 14, 1999 (date of inception) to June 30,
1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the 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, such financial statements present fairly, in
all material respects, the financial position of the Company as of June 30,
1999, and the results of its operations and its cash flows for the period from
May 14, 1999 (date of inception) to June 30, 1999, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. The Company is a
development stage enterprise engaged in the development and management of an
Internet site. As discussed in Notes 2 and 3 to the financial statements, the
Company's operating loss since inception and the contingency surrounding equity
shares issued as part of the Private Placement Memorandum raise substantial
doubt about its ability to continue as a going concern. Management's plans
concerning these matters are also described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of these
uncertainties.
Deloitte & Touche LLP
Certified Public Accountants
Tampa, Florida
September 30, 1999
F-3
<PAGE>
DOCTORSURF.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
JUNE 30, 1999
- --------------------------------------------------------------------------------
ASSETS
Cash $ 290,631
Investments - certificate of deposit 200,000
Prepaid expenses 10,950
--------
TOTAL ASSETS $ 501,581
========
LIABILITIES AND STOCKHOLDERS' EQUITY
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 31,875
--------
COMMON STOCK SUBJECT TO RESCISSION OFFER -
$.01 par value, 320,000 shares
issued and outstanding (Note 3) 320,000
SUBSCRIPTION RECEIVABLE (50,000)
--------
270,000
--------
COMMITMENTS AND CONTINGENCIES (Note 3)
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value - 5,000,000 shares
authorized; no shares issued or outstanding -
Common stock, $.01 par value - 95,000,000 shares
authorized; 25,000,000 shares issued and outstanding 250,000
Deficit accumulated during the development stage (50,294)
--------
Total stockholders' equity 199,706
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 501,581
========
See notes to financial statements.
F-4
<PAGE>
DOCTORSURF.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
PERIOD FROM MAY 14, 1999 (DATE OF INCEPTION) TO JUNE 30, 1999
- --------------------------------------------------------------------------------
OPERATING EXPENSES $ (50,294)
--------
NET LOSS $ (50,294)
========
See notes to financial statements
F-5
<PAGE>
DOCTORSURF.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
PERIOD FROM MAY 14, 1999 (DATE OF INCEPTION) TO JUNE 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Additional
Preferred Stock Common Stock Paid-in Retained
Shares Amount Shares Amount Capital Earnings Total
<S> <C> <C> <C> <C> <C> <C> <C>
INITIAL ISSUANCE OF COMMON
STOCK, MAY 14, 1999 (Note 1) - $ - 25,000,000 $ 250,000 $ - $ - $ 250,000
Net loss - - - - - (50,294) (50,294)
------ ------ ---------- -------- ------ -------- --------
BALANCES, JUNE 30, 1999 - $ - 25,000,000 $ 250,000 $ - $ (50,294) $ 199,706
====== ====== ========== ======== ====== ======== ========
</TABLE>
See notes to financial statements.
F-6
<PAGE>
DOCTORSURF.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
PERIOD FROM MAY 14, 1999 (DATE OF INCEPTION) TO JUNE 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C>
Net loss $ (50,294)
Adjustments to reconcile net loss to net cash used in
operating activities:
Increase in prepaid expenses (10,950)
Increase in accounts payable and accrued expenses 31,875
--------
Net cash used in operating activities (29,369)
--------
CASH USED IN INVESTING ACTIVITIES -
Investment in certificate of deposit (200,000)
--------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from collection of subscription receivable 5,000
Proceeds from common stock subject to rescission offer (Note 3) 270,000
Proceeds from issuance of common stock 245,000
--------
Net cash provided by financing activities 520,000
--------
NET INCREASE IN CASH 290,631
CASH, BEGINNING OF PERIOD -
--------
CASH, END OF PERIOD $ 290,631
========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ -
========
Cash paid during the period for income taxes $ -
========
SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES:
Issuance of common stock for subscription receivable $ 50,000
========
</TABLE>
See notes to financial statements.
F-7
<PAGE>
DOCTORSURF.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
Notes to financial statements
period FROM MAY 14, 1999 (DATE OF INCEPTION) TO JUNE 30, 1999
- --------------------------------------------------------------------------------
1. ORGANIZATION AND NATURE OF BUSINESS
DoctorSurf.com, Inc. (the "Company") was formed pursuant to the Florida
Business Corporation Act on April 15, 1999. On May 14, 1999, 25 million
common shares of the Company were sold in exchange for $250,000. The
Company was incorporated to provide a premier Internet web site for
doctors that is dedicated to doctor education, communication, and
information exchange using state-of-the-art technology, security,
doctor authentication, and a combination of Internet protocols. The
Company is actively working on activating its web site during the first
quarter of 2000. The Company's fiscal year-end is December 31.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation - The accompanying financial statements have been
prepared assuming that the Company will continue as a going concern. As
reflected in the financial statements, the Company is a development
stage enterprise, which has yet to generate revenues to support further
operations. As of June 30, 1999, the Company had not hired any
employees. Certain shareholders of the Company had contributed their
personal services to the Company; however, the value of these services
is considered immaterial and, therefore, no expense has been recorded.
In order to fund operations to date, the Company has relied on funding
raised from sales of the Company's equity securities. The Company's
operating losses since inception and the contingency surrounding equity
shares issued as part of the Private Placement Memorandum (see Note 3)
raise substantial doubt about its ability to continue as a going
concern.
The Company's success is dependent upon its ability to raise
additional, sufficient investment capital to support the design and
implementation of viable Internet web sites, thereby generating
revenues to continue to fund operations. Management believes that, via
a planned private offering, the Company will be able to generate
sufficient working capital to sustain operations and allow such
development activities to occur.
The Company is subject to the risks and difficulties experienced by any
new Internet-based business, such as limited operating history,
competition, potential inability to locate Internet service providers
and possible changes in domestic and foreign government regulation
which may affect the acceptability of the Company's product by
customers. Ultimately, the attainment of profitable operations is
dependent upon future events including achieving a level of sales to
support the Company's cost structure.
Cash and Cash Equivalents - The Company considers all highly liquid
investments with a maturity at time of purchase of three months or less
to be cash equivalents.
Concentration of Risk - The Company maintains its cash and its
certificate of deposit in bank deposit accounts which, at times, may
exceed federally insured limits. The Company has not experienced any
losses in such accounts.
Subscription Receivable - On June 21, 1999, in connection with the
private placement in process (see Note 3), the Company entered into a
stock subscription agreement with an individual to sell 75,000 shares
of the Company's common stock at a purchase price of $1.00 per share.
The Company received
F-8
<PAGE>
$25,000 cash and a subscription receivable for $50,000. The receivable
balance at June 30, 1999 was $50,000 and payment is due during November
1999.
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, the disclosures of contingent assets
and liabilities at the date of the financial statements, and the
reported amounts of expenses during the reported period. Actual results
could differ from those estimates.
Income Taxes - The Company has adopted Statement of Financial
Accounting Standards No. 109 ("SFAS 109"), Accounting for Income Taxes.
Under SFAS 109, the Company uses the asset and liability method which
recognizes the amount of current and deferred taxes payable or
refundable at the date of the financial statements as a result of all
events that have been recognized in the financial statements and as
measured by the provisions of enacted tax laws.
The Company has a gross deferred tax asset as of June 30, 1999 of
approximately $18,800. This asset is comprised of the potential future
tax benefit of its operating losses to date. Management has evaluated
the available evidence regarding the future taxable income and other
possible sources of realization of deferred tax assets. A 100 percent
valuation allowance has been established by management against the
gross deferred tax asset as it is more likely than not that the
deferred tax asset will not be realized.
Fair Value of Financial Instruments - The estimated fair value of
amounts reported in the financial statements have been determined by
using available market information and appropriate valuation
methodologies. The carrying values of assets and liabilities
approximate their fair values because of their short-term nature.
New Accounting Pronouncement - The American Institute of Certified
Public Accountants issued Statement of Position ("SOP") No. 98-5,
Reporting on the Costs of Start-Up Activities. The standard provides
guidance on the financial reporting costs for start-up costs and
organization costs. This standard requires cost of start-up and
organization costs to be expensed as incurred, and is effective for
fiscal years beginning after December 15, 1998. The Company does not
believe adoption of this SOP will have a material impact on its
financial statements.
3. COMMITMENTS AND CONTINGENCIES
Pursuant to a Private Placement Memorandum, the Company offered 750,000
shares of the Company's common stock to be purchased at $1 per share.
As of June 30, 1999, 320,000 shares of the 750,000 shares offered had
been sold. In July and August 1999, the Company received an additional
$430,000 from the issuance of 430,000 shares of common stock related to
this Private Placement Memorandum. Due to a possible violation of the
Securities Act of 1933 requirements, the Company has issued a
memorandum to the purchasers of the shares enabling them to sell their
shares back to the Company through August 25, 2000 for the purchase
price of $1. As such, the proceeds from the issuance of the 320,000
shares of common stock have been classified outside of equity in the
accompanying balance sheet under the caption Common Stock Subject to
Rescission Offer. For the period from June 30, 1999 to September 30,
1999, no investors have requested the Company to repurchase their
shares.
4. SUBSEQUENT EVENTS
The Company is in the process of completing a Form SB-2 filing for the
issuance of 25,000,000 shares of common stock to be issued at no cost
to doctors who become secured members on the Company's web site. The
fair market value of these shares will be charged to operations as
promotion costs at the time of their issuance.
F-9
<PAGE>
During September 1999, the Company hired employees to maintain and
update the Company's web site. These employees are receiving
compensation.
During September 1999, the Company entered into an operating lease
agreement for office space. The term of the lease is one year and calls
for monthly rental payments of $1,200 plus applicable taxes.
During September 1999, the Company entered into a capital lease
agreement for computer equipment. The term of the lease is three years
and calls for monthly rental payments of approximately $1,850 plus
applicable taxes. The lease agreement contains a bargain purchase
option.
F-10
<PAGE>
DoctorSurf.com, Inc.
(A Development Stage Company)
Condensed Financial Statements (Unaudited)
as of September 30, 1999
and for the Period from May 14, 1999
(date of inception) to September 30, 1999
F-11
<PAGE>
DOCTORSURF.COM, INC.
(A Development stage company)
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Page
CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
AS OF SEPTEMBER 30, 1999 AND FOR THE PERIOD FROM
MAY 14, 1999 (DATE OF INCEPTION) TO SEPTEMBER 30, 1999:
Condensed Balance Sheet F-13
Condensed Statements of Operations F-14
Condensed Statement of Stockholders' Equity F-15
Condensed Statements of Cash Flows F-16
Condensed Notes to Financial Statements F-17
F-12
<PAGE>
DOCTORSURF.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEET (UNAUDITED)
SEPTEMBER 30, 1999
- --------------------------------------------------------------------------------
ASSETS
Cash $ 40,778
Investments - certificates of deposit 802,540
Prepaid expenses 38,766
--------
882,084
Property and equipment - net 67,706
Other assets 1,603
--------
TOTAL ASSETS $ 951,393
========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 103,939
Current portion of long-term obligations 29,302
--------
133,241
--------
COMMON STOCK SUBJECT TO RECISSION OFFER -
$.01 par value, 750,000 shares issued and outstanding 750,000
SUBSCRIPTION RECEIVABLE (45,000)
--------
705,000
--------
LONG-TERM OBLIGATIONS LESS CURRENT PORTION 40,001
--------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value - 5,000,000 shares authorized;
no shares issued or outstanding -
Common stock, $.01 par value - 95,000,000 shares authorized;
25,000,000 shares issued and outstanding 250,000
Paid-in capital 84,000
Deficit accumulated during the development stage (260,849)
--------
Total stockholders' equity 73,151
--------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 951,393
========
See condensed notes to financial statements.
F-13
<PAGE>
DOCTORSURF.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 1999 AND
PERIOD FROM MAY 14, 1999 (DATE OF INCEPTION) TO SEPTEMBER 30, 1999
- --------------------------------------------------------------------------------
Three Months Period From
Ended May 14, 1999 to
September 30, 1999 September 30, 1999
OPERATING EXPENSES $ (220,344) $ (270,638)
INTEREST INCOME 9,789 9,789
--------- ---------
NET LOSS $ (210,555) $ (260,849)
========= =========
See condensed notes to financial statements
F-14
<PAGE>
DOCTORSURF.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
PERIOD FROM MAY 14, 1999 (DATE OF INCEPTION) TO SEPTEMBER 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Deficit
Accumulated
During the
Preferred Stock Common Stock Paid-in Development
Shares Amount Shares Amount Capital Stage Total
<S> <C> <C> <C> <C> <C> <C> <C>
INITIAL ISSUANCE OF COMMON
STOCK, MAY 14, 1999 - $ - 25,000,000 $ 250,000 $ - $ - $ 250,000
Net loss - - - - - (260,849) (260,849)
Capital contribution for services
rendered - - - - 84,000 - 84,000
----- ----- ---------- -------- ------- --------- --------
BALANCES, SEPTEMBER 30, 1999 - $ - 25,000,000 $ 250,000 $ 84,000 $ (260,849) $ 73,151
===== ===== ========== ======== ======= ========= ========
</TABLE>
See condensed notes to financial statements.
F-15
<PAGE>
DOCTORSURF.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 1999 AND
PERIOD FROM MAY 14, 1999 (DATE OF INCEPTION) TO SEPTEMBER 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Period From
Ended May 14, 1999 to
September 30, 1999 September 30, 1999
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (210,555) $ (260,849)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation expense 1,055 1,055
Capital contribution for services rendered 84,000 84,000
Increase in prepaid expenses and other current assets (27,816) (38,766)
Increase in other assets (1,603) (1,603)
Increase in accounts payable and accrued expenses 72,064 103,939
--------- ---------
Net cash used in operating activities (82,855) (112,224)
--------- ---------
CASH USED IN INVESTING ACTIVITIES:
Purchases of property and equipment (15,640) (15,640)
Investment in certificates of deposit (602,540) (802,540)
--------- ---------
Net cash used in investing activities (618,180) (818,180)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term obligations 25,820 25,820
Payments of long-term obligations (9,638) (9,638)
Proceeds from common stock subject to rescission offer 435,000 705,000
Proceeds from issuance of common stock - 250,000
--------- ---------
Net cash provided by financing activities 451,182 971,182
--------- ---------
NET (DECREASE) INCREASE IN CASH (249,853) 40,778
CASH, BEGINNING OF PERIOD 290,631 -
--------- ---------
CASH, END OF PERIOD $ 40,778 $ 40,778
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ - $ -
========= =========
Cash paid during the period for income taxes $ - $ -
========= =========
SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES:
Capital lease obligation incurred for purchase of equipment $ 53,121 $ 53,121
========= =========
Issuance of common stock for subscription receivable $ - $ 50,000
========= =========
Capital contribution for services rendered $ 84,000 $ 84,000
========= =========
</TABLE>
See condensed notes to financial statements.
F-16
<PAGE>
DOCTORSURF.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED Notes to financial statements (UNAUDITED) period FROM MAY 14, 1999
(DATE OF INCEPTION) TO SEPTEMBER 30, 1999
- --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
The accompanying Condensed Financial Statements of DoctorSurf.com, Inc.
(the "Company") are unaudited and should be read in conjunction with
the audited Financial Statements and notes thereto for the period from
May 14, 1999 (date of inception) to June 30, 1999.
Long-term obligations consist of capital leases and the financing of an
insurance policy.
For the three months ended September 30, 1999, the Company recorded
compensation expense of $84,000 for the fair market value of the
services rendered by certain shareholders. The Company will not pay
these shareholders for their services; therefore, paid-in capital was
credited for $84,000.
In the opinion of management, all adjustments necessary for a fair
presentation of such Condensed Financial Statements have been included.
Such adjustments consist only of normal recurring items. Interim
results are not necessarily indicative of results for a full year. The
Condensed Financial Statements and notes thereto are presented as
permitted by the Securities and Exchange Commission and do not contain
certain information included in the Company's audited Financial
Statements and notes thereto for the period from May 14, 1999 (date of
inception) to June 30, 1999.
2. INCOME TAXES
The Company has adopted Statement of Financial Accounting Standards No.
109 ("SFAS 109"), Accounting for Income Taxes. Under SFAS 109, the
Company uses the asset and liability method which recognizes the amount
of current and deferred taxes payable or refundable at the date of the
financial statements as a result of all events that have been
recognized in the financial statements and as measured by the
provisions of enacted tax laws.
The Company has a gross deferred tax asset as of September 30, 1999 of
approximately $33,700. This asset is comprised of the potential future
tax benefit of its operating losses to date. Management has evaluated
the available evidence regarding the future taxable income and other
possible sources of realization of deferred tax assets. A 100 percent
valuation allowance has been established by management against the
gross deferred tax asset as it is more likely than not that the
deferred tax asset will not be realized.
3. SIGNIFICANT EVENTS
Pursuant to a Private Placement Memorandum, the Company offered 750,000
shares of the Company's common stock to be purchased at $1 per share.
As of September 30, 1999, all of the 750,000 shares offered have been
sold. Due to a possible violation of the Securities Act of 1933
requirements, the Company has issued a memorandum to the purchasers of
the shares enabling them to sell their shares back to the Company
through August 25, 2000 for the purchase price of $1. As such, the
proceeds from the issuance of the 750,000 shares of common stock have
been classified outside of equity in the accompanying condensed balance
sheet under the caption Common Stock Subject to Rescission Offer. As of
December 1, 1999, no investors have requested the Company to repurchase
their shares.
F-17
<PAGE>
During September 1999, the Company entered into an operating lease for
office space. The term of the lease is one year and requires monthly
rental payment of $1,200 plus applicable taxes.
During September 1999, the Company entered into a capital lease
agreement for computer equipment. The term of the lease is three years
and requires monthly payments of approximately $1,930 plus applicable
taxes. The lease agreement contains a bargain purchase option.
4. SUBSEQUENT EVENTS
The Company is in the process of completing a Form SB-2 filing for the
issuance of 25,000,000 shares of common stock to be issued at no cost
to doctors who become secured members on the Company's web site. The
fair market value of these shares will be charged to operations as
promotion costs at the time of their issuance.
During October and November 1999, the Company hired five additional
employees to maintain and update the Company's web site. These
employees are receiving compensation.
In November 1999, the Company entered into an agreement with accounting
professionals whereby these professionals will assist the Company in
the preparation of financial statement projections to be used in the
Company's business plan. Estimated fees are $120,000, to be paid in
three $20,000 monthly installments and three issuances of 20,000 shares
of common stock of the Company, commencing November 15, 1999. The cash
flow sources for the payments required by this agreement will be the
proceeds from the Company's prior issuances of common stock.
******
F-18
<PAGE>
We have not authorized anyone to provide
any information or to make any representations
in connection with this offering other than the
information or representations contained in this
prospectus. You should not rely on any
additional information or representations if
made. 25,000,000 SHARES
This prospectus does not constitute an
offer to sell or a solicitation of an offer to buy
any security:
DOCTORSURF.COM, INC.
o except the common stock offered by
this prospectus;
o in any jurisdiction in which the offer or
solicitation is not authorized;
o in any jurisdiction where the dealer or
other salesperson is not qualified to
make the offer or solicitation;
o to any person to whom it is unlawful to
make the offer or solicitation; or _____________
o to any person who is not a United
States resident or who is outside the PROSPECTUS
jurisdiction of the United States.
_____________
The delivery of this prospectus or any
accompanying sale does not imply that:
o there have been no changes in the
affairs of DoctorSurf after the date of
this prospectus; or
o the information contained in this
prospectus is correct after the date of
this prospectus.
Until [ ], all dealers that effect
transactions in these securities, whether or not
participating in this offering, may be required to
deliver a prospectus. This is in addition to the
dealers' obligation to deliver a prospectus when
acting as underwriters and with respect to their
unsold allotments or subscriptions.
------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of directors and officers
Florida Corporation Law provides that a Florida corporation has the
power to indemnify any person who is a party to any proceeding, other than an
action by, or in the right of the corporation reason of the fact that the person
was a director, officer, employee or agent of the corporation if the person
acted in good faith and in a manner the person reasonably believed to be in, or
not opposed to, the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe the person's
conduct was unlawful. Article IX of DoctorSurf's bylaws provides indemnification
to DoctorSurf's directors and officers if they are involved in any action, suit
or proceeding of any nature by reason of the fact that he or she is or was a
director or officer of DoctorSurf.
Item 25. Other expenses of issuance and distribution
Securities and Exchange Commission filing fee............ $ 6,950
Printing and engraving expenses.......................... $ 10,000
Accountants' fees and expenses........................... $ 40,000
Legal fees and expenses.................................. $ 100,000
Miscellaneous ....................................... $ 18,550
========
Total.................................. $ 175,000
DoctorSurf will pay all of the fees, costs and expenses set forth
above. Other than the SEC filing fee, all fees and expenses are estimated.
Item 26. Recent sales of unregistered securities
In May 1999, DoctorSurf issued a total of 25,000,000 shares of common
stock to seventeen investors at $.01 per share pursuant to an exemption from
registration under Rule 506 of Regulation D of the Securities Act of 1933.
In August 1999, DoctorSurf completed a private placement of 750,000
shares of common stock at $1.00 per share to accredited investors in a private
placement exempt from registration under Rule 506 of Regulation D of the
Securities Act of 1933. A possibility exists that an exemption from registration
was not available for the shares of common stock that we sold in our private
placement. Accordingly, we have offered to each purchaser in the private
placement the right to resell their shares to us and receive a refund of the
price paid by them of $1 per share. See "Recent Developments".
II-1
<PAGE>
Item 27. Exhibits
Exhibit
Number Exhibit Description
- ------- -------------------
3.1a* Articles of incorporation of the registrant
3.1b* Articles of amendment to articles of incorporation of the
registrant
3.2* By-laws of the registrant
5.1* Opinion of Foley & Lardner regarding legality
10.1* Technology Agreement between Weblink Communications, Inc. and
DoctorSurf.com, Inc.
10.2* Lease Agreement dated as of September 1, 1999, between
DoctorSurf.com, Inc. and the Pinellas Center for the Visually
Impaired, Inc.
23.1* Consent of Foley & Lardner - included in Exhibit 5.1
23.2 Consent of Deloitte & Touche LLP
24.1* Power of Attorney relating to subsequent amendments - included on
the signature page of this registration statement.
27* Financial Data Schedule
*Previously filed
Item 28. Undertakings
The undersigned small business issuer undertakes as follows:
(a) The small business issuer will:
(1) file, during any period in which it offers
or sells securities, a post-effective amendment to this registration statement
to:
(i) Include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) Reflect in the prospectus any facts or
events which, individually or together, represent a fundamental change in the
information in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total dollar value
of securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than a 20%
II-2
<PAGE>
change in the maximum offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) Include any additional or changed
material information on the plan of distribution.
(2) For determining any liability under the
Securities Act of 1933, treat each post-effective amendment as a new
registration statement of the securities offered, and the offering of the
securities at that time shall be deemed to be the initial bona fide offering.
(3) File a post-effective amendment to remove
from registration any of the securities that remain unsold at the end of the
offering.
(4) Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the issuer pursuant to the foregoing provisions, or
otherwise, the issuer has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable.
II-3
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 Post-Effective Amendment No. 2 and
authorized this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Largo, State of Florida,
on this 22nd day of February, 2000.
DOCTORSURF.COM, INC.
By: /s/ Rakesh K. Sharma
--------------------------------------
Rakesh K. Sharma, president and
member of the board of directors
In accordance with the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Rakesh K. Sharma president and director (principal executive February 22, 2000
- ------------------------- officer)
Rakesh K. Sharma
/s/ Jugal K. Taneja vice-president and director (principal February 22, 2000
- ------------------------- financial and accounting officer)
Jugal K. Taneja
/s/ Martin A. Traber director February 22, 2000
- -------------------------
Martin A. Traber
</TABLE>
II-4
Exhibit 23.2
------------
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post Effective Amendment No. 2 to Registration
Statement No. 333-80475 of DoctorSurf.com, Inc. of our report dated
September 30, 1999 appearing in the Prospectus, which is part of this
Registration Statement.
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
DELOITTE & TOUCHE LLP
Tampa, Florida
February 22, 2000
