UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of The Securities Exchange Act of 1934
HEALTHCARE SOFTWARE, INC.
(Name of Small Business Issuer in its charter)
Nevada 88-0429414
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
611 Mulberry Road 34747
(Address of principal executive offices) (zip code)
Issuer's telephone number: (877) 603-4382
Securities to be registered under section 12(b) of the Act:
Title of each class Name on each exchange on which each class
is to be registered
NONE
Securities to be registered pursuant to Section 12(g) of the Act.
Common Stock, $.0001 par value
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TABLE OF CONTENTS
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Introductory Statement. . . . . . . . . . . . . . . . . . . . . . i
Part I
Item I DESCRIPTION OF BUSINESS. . . . . . . . . . . . . . . . . . 1
A. Business Development and Summary . . . . . . . . . . . . . . . 1
B. Principal Products and Services and Principal Markets. . . . . 1
Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Strategy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
C. Distribution Methods of the Products or Services . . . . . . . 2
a) Distribution. . . . . . . . . . . . . . . . . . . . 2
b) Advertising and Promotion . . . . . . . . . . . . . 2
c) Customer Service. . . . . . . . . . . . . . . . . . 2
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS 0F FINANCIAL
CONDITION AND PLAN OF OPERATION. . . . . . . . . . . . . . . 2
A. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
B. Segment Data . . . . . . . . . . . . . . . . . . . . . . . . . 3
C. Results of Operations. . . . . . . . . . . . . . . . . . . . . 3
a) Pre-Operating Expenses . . . . . . . . . . . . . . . 4
b) Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
D. Liquidity and Capital Resources. . . . . . . . . . . . . . . . 4
E. Governmental Approval, Regulation and Environmental Compliance 5
F. Risks Associated with Operations . . . . . . . . . . . . . . . 5
G. Competition. . . . . . . . . . . . . . . . . . . . . . . . . . 5
H. Developing and Changing Market . . . . . . . . . . . . . . . . 5
I. Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
J. Risks Associated with Year 2000. . . . . . . . . . . . . . . . 6
K. Additional Information . . . . . . . . . . . . . . . . . . . . 6
Item 3 DESCRIPTION OF PROPERTY . . . . . . . . . . . . . . . . . 6
Item 4 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL. OWNERS
AND MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . 7
Item 5 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND
CONTROL PERSONS . . . . . . . . . . . . . . . . . . . . . 8
Item 6 EXECUTIVE COMPENSATION. . . . . . . . . . . . . . . . . . 8
Item 7 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. . . . . . 9
Item 8 DESCRIPTION OF SECURITIES . . . . . . . . . . . . . . . . 9
Part II
Item 1 MARKET FOR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS. . . . . . . . . . . . . . . .. . . . 10
Item 2 LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . 10
Item 3 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS . . . . . . 10
Item 4 RECENT SALES OF UNREGISTERED SECURITIES . . . . . . . . . 10
Item 5 INDEMNIFICATION OF DIRECTORS AND OFFICERS . . . . . . . . 10
Part F/S
FINANCIAL STATEMENTS AND EXHIBITS . . . . . . . . . . . . . . . . 13
SIGNATURE PAGE. . . . . . . . . . . . . . . . . . . . . . . . . . 14
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i
Introductory Statement
Healthcare Software, Inc. (the "Company") has elected to file this Form 10SB
registration statement on a voluntary basis in order to become a reporting
company under the Securities Act of 1934. The primary purpose for this is that
the Company intends to be listed for trading on the OTC Electronic Bulletin
Board. Under the current NASD rules, in order to become listed on the OTC
Electronic Bulletin Board, a company now must be a reporting company under the
Securities Act of I 934.
This registration statement, including the information that may be incorporated
herein by reference, contains forward-looking statements including statements
regarding, among other items, the Company's business and growth strategies, and
anticipated trends in the Company's business and demographics. These
forward-looking statements are subject to a number of risks and uncertainties,
certain of which are beyond the Company's control. Actual results could differ
materially from these forward-looking statements as a result of factors
described in this section "Risk Factors." including among others, regulatory or
economic influences.
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10
PART I
Item I DESCRIPTION OF BUSINESS
A. BUSINESS DEVELOPMENT AND SUMMARY
Healthcare Software, Inc., hereinafter referred to as "The Company" or
Healthcare Software, was organized by the filing of articles of incorporation
with the Secretary of State of the State of Nevada on June 17, 1999. The
articles of The Company authorized the issuance of one hundred million
(100,000,000) shares of Common Stock at a par value of $0.0001 per share.
The Company is a developmental stage company with the principal business
objective to provide software for the healthcare industry, specifically
hospitals. The Company intends to develop software for the hospital industry,
targeting the lower tier 40% of hospitals, which, up to this point, could not
afford quality software, according to management. The Company plans to deliver
its software to the hospitals via the Internet, and store hospital information
on the Company's storage equipment, thereby saving hospital's thousands of
dollars in computer storage equipment, initial software purchases, ongoing
training expenditures, and expensive personnel to maintain and control the
software and equipment.
This is the newest in the continued development of the Internet, according to
management. That is, providing software via the Internet. Becoming an "ASP"
(Applications Service Provider) is the untapped frontier and natural progression
for software developers, management contends. With software provided on the
Web, hospitals will be able to update their software products once a month or
once a week instead of once every year and a half. Clients will be charged a
fee to access the programs, based upon usage.
No specific hospitals have signed a contract with the Company as yet, and
the Company anticipates 6 to 9 months until the research phase is completed, and
software is identified and developed in order to begin phase II, when calls to
hospitals will be made and revenues will be expected.
The Company intends to focus on achieving and maintaining profitability,
also ensuring tight financial and systems control by 1) being fully prepared for
the possible onslaught of "hits" to its website, while still providing top
quality customer service, 2) focusing on quality, not quantity, of new staff, 3)
instituting financial/accounting software systems to enable tight cash flow, and
minimizing long-term contractual arrangements with suppliers.
B. PRINCIPAL PRODUCTS AND SERVICES AND PRINCIPAL MARKETS
OVERVIEW
Healthcare Software has the principal objective to become a leading ASP for
the hospital industry. It is planned that hospitals will be able to download
software via the Internet for use in one or all of its departments, use the
software, use the storage capabilities of the Company, and only pay for the time
the hospital uses the software on a monthly fee. Currently, this type of
software used by hospitals is sold outright for tens of thousands of dollars,
requiring additional thousands of dollars for equipment, training and upgrades.
STRATEGY
The Company plans to have a special focus on the lower tier 40% of
hospitals who could not afford quality software for their many departments,
including Emergency Room, Radiology, Admissions, Surgery, Laboratory, etc.
Because of the intended cost savings of accessing the software via the Internet,
these hospitals may be able to afford multiple-faceted, compatible software in
all of its departments. The hierarchy of the hospital system is set up such
that the hospital administrator must make the decisions regarding tens of
thousands of dollars of expenditures. However, the Company plans to offer its
products on a lower monthly fee basis, allowing certain department heads to make
the buying decisions, according to management. The Company believes this will
make the usage and sale of the Company's product that much easier and faster.
C. DISTRIBUTION METHODS OF THE PRODUCTS OR SERVICES
a) Distribution:
The Company plans to distribute its software products
through the Internet. In doing so, the Company plans to have a secure website
for hospital employees to access the software and information. The Company
believes the website will also provide an audience for other revenue-making
projects, such as banners, affiliate sales and related products.
b) Advertising and Promotion
The Company plans to market its products directly to hospital
department heads through direct sales personnel. Appropriate sales literature
is planned and being developed, as well as video presentations. The Company
believes its marketing plan of offering a free month trial of its software via
the Internet will allow hospitals the opportunity to test its product and
discover its ease of operation.
c) Customer Service
The Company recognizes the need for an effective and responsive
customer service base. Using its planned website, the Company is developing a
customer service strategy to include a help section on the Internet for
immediate response to its customers, as wells as chat rooms for users of its
products on a 24-hour basis.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF
OPERATION
The following discussion should be read in conjunction with, and is
qualified in its entirety by the Financial Statements section included below.
With the exception of historical matters, the matters discussed herein are
forward looking statements that involve risks and uncertainties. Forward looking
statements include, but are not limited to, statements concerning anticipated
trends in revenues and net income, the date of introduction or completion of the
Company's products, projections concerning operations and available cash flow.
The Company's actual results could differ materially from the results discussed
in such forward looking statements. The following discussion of the Company's
financial condition and results of operations should be read in conjunction with
the Company's financial statements and the related notes thereto appearing
elsewhere herein.
OVERVIEW
(1) The Company, since raising its initial capital, has concentrated on
researching and developing software products for the hospital industry. The
Company is formulating its plans for introduction of its planned products on the
Internet, as well as its marketing strategies. The Company has also identified
potential employees for the development of its products, and continued service.
During the initial phase of researching and developing, the Company
anticipates the need for additional capital for equipment, personnel, and
offices. Its current office at the home of its President, 611 Mulberry Rd.,
Celebration, FL 34747, is being used free of charge and should be adequate for
the next few months, as research and plans are formulated.
On July 24, 1999, the Company completed an offering of 20,000,000
shares of the Common Stock of the Company to approximately 28 unaffiliated
shareholders. This offering was made in reliance upon an exemption from the
registration provisions of Section 4(2) of the Securities Act of 1933 (the
"Act"), as amended, pursuant to Regulation D, Rule 504 of the Act. As of the
date of this filing, the Company has approximately 20,000,000 shares of its
$0.0001 par value common voting stock issued and outstanding which are held by
29 shareholders of record. Management fully anticipates that the proceeds from
the sale will be sufficient to provide for the Company's capital needs for the
next approximately three (3) to six (6) months, during its research stage of
development.
In addition, management of the Company believes the needs for additional
capital going forward will
be derived somewhat from internal revenues and earnings generated from the sale
of its products and
services. If the Company is unable to begin to generate revenues from its
anticipated products,
management believes the Company will need to raise additional funds to meet its
cash requirements.
The Company believes that its initial revenues will be primarily dependent
upon the number of hospitals it can attract, the quality of its software, the
professionalism of its customer service plan, and the profit margins on the
products it offers. Realization of significant sales of the Company's products
and services during the fiscal year ending December 31, 1999 is vital to its
plan of operations. To that end, realization of developing quality hospital
software and selling its products to the target market is paramount to its plan.
(2) No engineering, management or similar report has been prepared or
provided for external use by the Company in connection with the offer of its
securities to the public.
(3) Management believes that the Company's future growth and success will be
largely dependent on its ability to obtain clients to use its products, to
attract a stable sales force, to develop quality software, to market and
advertise effectively and efficiently, and its choice of profitable products.
The Company has yet to incur any research and development costs from July 15,
1999, to present, and the Company does not expect to incur any significant
research amid development expenses during the fiscal year ending December 31,
1999.
(4) The Company expects to purchase regular office equipment, i.e., desks,
calculators, computers within the next 12 months. The Company also intends to
purchase/lease adequate computer equipment for storage and information
dissemination via the Internet for its products and services. The Company does
not have any facilities or equipment to sell at this time.
(5) Management anticipates that it will hire and add 5 full time employees
over the next twelve (12) months, as well as a sales force which will be paid on
a commission-only basis. Employees will not be added during Phase I, the
research period. Employees will be added as revenues permit.
(6) From inception in June, 1999 through present, the Company has devoted a
majority of its time on research and development. During this time, the Company
incurred start up costs of $80,000 which has been paid by Tom Cochran,
individually. This cost included all start up costs of attorney, filing fees,
and accountants, as well as advisory and consulting services. This $80,000
start up costs is borne solely by Tom Cochran, and is part of his contribution
to the Company, for which he has received 18,000,000 shares in the Company,
constituting a 90% controlling position.
B. SEGMENT DATA
There were no revenues from sales since its inception June 17, 1999.
Because there was no revenue, no table showing percentage breakdown of revenue
by business segment or products/service line is included.
C. RESULTS OF OPERATIONS
There were no revenues from sales up to the date of this filing. Since its
inception, June 17, 1999, the Company has formed the Company's organization to
pursue its business strategy.
a) Pre-Operating Expenses. Pre-Operating expenses were not necessary, as all
costs for the Company's legal organization, legal expenses. and financial audits
are included in the start of costs of $80,000, already paid in full by Tom
Cochran, individually.
b) Revenues. The Company is a development state enterprise as defined in SFAS
#7, and has yet to generate any revenues. The Company is devoting substantially
all of its present efforts to: (1) develop materials and products to attract
hospitals, (2) develop plans of operations (sales strategies, customer service,
e-commerce), and (3) obtain sufficient capital to commence full operations.
D. LIQUIDITY AND CAPITAL RESOURCES
As of the date of this filing, the Company has $1,990 on hand or in
the bank. Until such time as the Company sets forth and implements its business
plan, there will he no need for additional capital, since Tom Cochran is
contributing his time and expenses at no cost during that time. Although the
complete strategic business plan has not yet been fully researched and put
together, management, at present, foresees the possibility of the need to raise
about $500,000 in additional capital to fully enter the revenue stage of its
plan.
The receipt of funds from Private Placement Offerings and loans
obtained through private sources by the Company are a possibility to fund the
Company until revenues can be achieved. Since inception, the Company has
financed its cash flow requirements though issuance of common stock and through
contributions from Tom Cochran. As the Company expands its activities, it may
continue to experience net negative cash flows from operations, pending receipt
of sales revenues. Additionally the Company may be required to obtain additional
financing to fund operations through Common Stock offerings and bank borrowings,
to the extent available, or to obtain additional financing to the extent
necessary to augment its working capital.
Over the next twelve months, the Company intends to initiate its
revenues by contracting with hospitals in the Untied States for use of its
software products via the Internet. However, the Company will continue the
research and development of clients/products and in-depth plans. The Company
believes that existing capital and anticipated funds from operations will be
sufficient to sustain operations and planned expansion in the next three (3) to
six (6) months. However, the need for additional capital after that time may be
necessary. Consequently, the Company may seek additional financing in order to
sustain operations. There can be no assurance such additional funds will be
available or that, if available, such additional funds will be on terms
acceptable to the Company. In either case, the financing could have negative
impact on the financial conditions of the Company and its Shareholders.
The Company anticipates that it will incur operating losses in the
next twelve months. The Company's lack of operating history make predictions of
future operating results difficult to ascertain. The Company's prospects must be
considered in light of the risks, expenses and difficulties frequently
encountered by companies in their early stage of development, particularly
companies in new and rapidly evolving markets. Such risks for the Company
include, but are not limited to, an evolving and unpredictable business model
and the management of growth. To address these risks, the Company must, among
other things, obtain a customer base, implement and successfully execute its
business and marketing strategy, continue to develop its software products,
provide superior customer services and order fulfillment, respond to competitive
developments, and attract, retain and motivate qualified personnel. There can be
no assurance that the Company will be successful in addressing such risks, and
the failure to do so can have a material adverse effect on the Company's
business prospects, financial condition and results of operations.
Initial financing is only to provide funds to prove the business be necessary to
provide software to the hospital industry via the Internet. The Company hopes to
enter into additional funding arrangements through strategic partnerships,
merger, equity offering or debt offering. Nothing has been secured as of this
time.
E. GOVERNMENTAL APPROVAL, REGULATION AND ENVIRONMENTAL COMPLIANCE
Other than general business licensing requirements, management is
unaware of any governmental approval necessary for the Company's operations in
the marketing industry. In addition, management is unaware of existing or
probably governmental regulations on the marketing industry. Management
anticipates no material costs associated with compliance with either federal,
state or local environmental law.
There are no current federal, state or local laws, statutes, or rules
regulating the Internet at this time that would affect the Company. However, if
new enactments were to become effective, depending on the scope and extent of
such laws/regulations, the Company could be directly affected either adversely
or beneficially.
F. RISKS ASSOCIATED WITH OPERATIONS
The Company's long-term success is partially predicated on the
marketability of its hospital software products and the strength of its sales
force.
Its principal competition consists of entities within the software
industry which are well established. The Company's ability to compete against
these more established and more financially stable companies is premised upon
the Company's ability to initiate and fulfill its development plans.
Another uncertainty is the dependence on key personnel familiar with
the control, administration, development, and training of the sales force and
software developers. The loss of Tom Cochran, President, could have an adverse
effect on its continued operations.
Although research in the Company indicates that the Internet will
continue with little, if any regulation, and will continue to become a viable
marketing tool, there can be no assurances that the Internet will prove to be a
profitable outlay for the Company in its business plans.
While the Company's plan is being researched and developed thoroughly,
there is no assurance the plan will be accepted in or by the marketplace, nor,
that if it is accepted, that demand will be sufficient to make the Company
profitable. The Company cannot project with certainty the outcome of its
operations, and there are no assurances that the Company will operate profitably
in either the near or long term.
Local, national, and international economic conditions may have a
substantial adverse affect on the efforts of the Company. The Company cannot
guarantee against the possible eventuality of any potential adverse economic
conditions.
G. COMPETITION
The Company competes with numerous other software companies. Many of
these competitors have substantially greater resources than Healthcare Software.
The Company has identified a niche in the market as it relates to hospital
software, offering its product and updates over the Internet.
H. DEVELOPING AND CHANGING MARKET
The market conditions for selling software is continually evolving and
changing. The Company believes the current conditions will continue favorably
for this type of venture. There can be no assurance that the Company's
assessment of the situation is correct, nor that the products it selects will be
accepted by the clients.
I. EMPLOYEES
As of the current date, the Company has no paid employees. The Company
is dependent on Tom Cochran, President. Mr. Cochran does not plan to spend full
time efforts on the research and development of products, plans, and clients
during the first six months of operation. Once these plans are formulated, the
Company will need to hire full time operational staff as its operations
commence. Mr. Cochran is fully prepared to devote full time efforts at that
time, but there can be no assurance that other full time employment of Mr.
Cochran would not offer a better salary and package to Mr. Cochran and Mr.
Cochran could abandon the Company. The Company's future success also depends on
its ability to attract and retain other qualified personnel, for which
competition is intense. The loss of Mr. Cochran or the Company's inability to
attract and retain other qualified employees could have material adverse affect
on the Company.
J. RISKS ASSOCIATED WITH YEAR 2000
In less than two months, computer systems and/or software used by many
companies may need to be upgraded to accept four digit entries to distinguish
21st century dates from 20th century dates. The software being developed by the
Company is planned to be fully Y2K compliant. Management believes that Year
2000 issues should not adversely affect the Company or its customers. The
Company believes that because its software is easily upgraded via the Internet,
it will have an advantage over other companies in the healthcare software field
who may face serious Y2K issues. As the Company is fully aware of potential Y2K
problems and has no computers or software at this time, management does not
anticipate any loss of or delay in market acceptance of its products and
services, increased service and warranty costs, or payment by the Company of
compensatory or other damages which could have a material adverse effect on the
Company's business, financial condition, and results of operations.
K. ADDITIONAL INFORMATION
The Company intends to provide an annual report to its security
holders, and to make quarterly reports available for inspection by its security
holders. The annual report will include audited financial statements.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Act") and, in accordance with the
Commission, such reports, proxy statements and other information may be
inspected at public reference facilities of the Commission at Judiciary Plaza,
450 Fifth Street N.W., Washington D.C. 20549; Northwest Atrium Center, 500 West
Madison Street Suite 1400, Chicago. Illinois 60661; 7 World Trade Center, New
York, New York, 10048; and 5670 Wilshire Boulevard, Los Angeles, California
90036. Copies of such material can be obtained from the Public Reference Section
of the Commission at Judiciary Plaza, 450 Fifth Street N.W., Washington, D.C.
20549, at prescribed rates. For further information, the SEC maintains a website
that contains reports, proxy and information statements, and other information
regarding reporting companies at http:www.sec.gov
ITEM 3 DESCRIPTION OF PROPERTY
The Company currently pays no rent for its executive offices. Office
space is currently being used at the home of Tom Cochran. This office
arrangement is considered adequate for current and short-term operations of the
Company.
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ITEM 4 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of September 30,
1999, with respect to the beneficial ownership of Common Stock by (i) each
person who to the knowledge of the Company, beneficially owned or had the right
to acquire more than 5% of the Outstanding Common Stock, (ii) each director of
the Company and (iii) all executive offices and directors of the Company as a
group.
Name of Beneficial Owner (I) Number Percent
of Shares of Class (2)
Tom Cochran 18,000,000 90%
611 Mulberry Rd
Celebration, FL 34747
All Directors & Officers as a Group 18,000,000
(1) As used in this table, "beneficial ownership" means the sole or shared
power to vote, or to direct the voting of, a security, or the sole or shared
investment power with respect to a security (i.e., the power to dispose of, or
to direct the disposition of, a security). In addition, for purposes of this
table, a person is deemed, as of any date, top have "beneficial ownership" of
any security that such person has the right to acquire within 60 days after such
date.
(2) Figures are rounded to the nearest percentage.
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ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
The following table sets forth the names, positions with the Company and
ages of the executive officers and directors of the Company. Directors will be
elected at the Company's annual meeting of shareholders and serve for one year
or until their successors are elected and qualify. Officers are elected by the
Board, and their terms of office are, except to the extent governed by
employment contract, at the discretion of the Board.
Name Age Title
- ---- --- -----
Tom Cochran 47 President, Chairman
Duties, Responsibilities and Experience
Tom Cochran, President, Chairman
Tom Cochran attended DuPage University in Chicago, Illinois. From
1970 to 1976, Mr. Cochran managed, trained and supervised personnel in the
competitive photo field, as well as became a top producing sales representative.
He gained vast experience in administration, human resources, finances, and
management. In 1981, he broadened his horizons as owner of PC S International,
moving his operations to Honolulu, HI. At PCS, he brought the photo industry to
a new level of profits and distribution. In 1983, he expanded his sales and
administration efforts to begin Cochran International, Inc., a company
specializing in sales of products in Australia, New Zealand and Europe.
His Hospital Administration Software Solutions subsidiary earned $10
million its first year, with 150 employees. During his six years in the
healthcare software industry, he has had strong influence in product
development, sales, marketing and management. He has made key sales calls and
gained contracts with top government officials overseas.
Mr. Cochran is not an officer or director of a publicly traded company at
this time.
Notable achievements in his career and personal life include:
- - Personally increased operational efficiencies at his overseas subsidiaries
by more than 68% during a 24-month period
- - Doubled the size of his parent company each and every year for eight
consecutive years.
- - Ranked in the top 5% of students.
- - Awarded the coveted Ad Altari Dei Award as a Boy Scout, which is only
given to five scouts in each state.
- - Active member of the Make A Wish Foundation through its local arm, Give
Kids The World.
ITEM 6. EXECUTIVE COMPENSATION
Tom Cochran has not received, nor is he projected to receive, any
compensation for his services, including his capacities as Chairman and
President other than the issuance of the Company's Common Stock as set forth in
Item 4 above.
Should the Company become profitable and produce commensurate cash flows
from operations and/or through the sale of strategic investments, there may be
some level of compensation paid to him. However, this will be subject to
approval by the Company's Board of Directors. It is the responsibility of the
Company's Officers and its Board of Directors to determine the timing of any
remuneration for key personnel. Such determination and timing thereof will be
based upon such factors as positive cash flow to include equity sales, operating
cash flows, capital requirements, and a positive cash flow balance in excess of
$12,500 per month. At the time cash flow reaches this point, and appears to be
sustainable, the Officers and Board of Directors will again readdress the
compensation of its key personnel and set forth a more formal and complete plan
for remuneration in line with operations of the Company. At present, the
Company's management cannot accurately estimate the point when revenues and
operating cash flows will be sufficient enough to implement this compensation
plan, nor are they able to estimate the exact amount of compensation at this
time.
There are no annuity, pension, or retirement benefits proposed to be
paid of Officers, Directors, or employees of the Company in the event of
retirement at normal date pursuant to any presently existing plan provided or
contributed to by the Company, or any of its subsidiaries, if any.
KEY OFFICER EMPLOYMENT AGREEMENTS
No employment contracts have been negotiated or signed as yet. However, the
Company plans on having all key employees and officers sign a detailed
employment contract as appropriate.
COMPENSATION OF DIRECTORS
All directors will be reimbursed for expenses incurred in attending Board or
committee meetings.
STOCK OPTION PLAN AND NON-EMPLOYEE DIRECTORS' PLAN
No stock option plan has been set forth, and no non-employee directors' plan has
been instituted. The Company may decide, at a later date, and reserves the right
to, initiate these plans as deemed necessary by the Board.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Business Consultants. The Company has relied on J. Thomas Howard, LTD as key
business consultants while in its development stage. J. Thomas Howard, LTD has
provided the assistance in preparing the Company to become a reporting company.
For this assistance, the Company has issued 1,000,000 shares of Common Stock at
$.001 per share to companies under control by J. Thomas Howard, LTD.
ITEM 8. DESCRIPTION OF SECURITIES
The Company's Articles of Incorporation authorizes the issuance of 100,000,000
shares of common stock, $.000l par value per share, of which 20,000, 000 shares
were outstanding as of the date of this Prospectus. The Company is not
authorized to issue shares of preferred stock. Holders of shares of common
stock are entitled to one vote for each share on all matters to be voted on by
the stockholders. Holders of common stock have no cumulative voting rights.
Holders of shares of common stock are entitled to share ratably in dividends, if
any, as may be declared, from time to time by the Board of Directors in its
discretion, from funds legally available therefor. In the event of a
liquidation, dissolution or winding up of the Company, the holders of shares of
common stock are entitled to share pro rata all assets remaining after payment
in full of all liabilities. Holders of common stock have no preemptive rights to
purchase the Company's common stock. There are no conversion rights or
redemption or sinking fund provisions with respect to the common stock. All of
the outstanding shares of common stock are validly issued, fully paid and
non-assessable. The Company has not authorized any Preferred Stock, Convertible
Stock, or Warrants as of the date of this filing.
TRANSFER AGENT
The transfer agent for the common stock is Florida Atlantic Stock Transfer, 7130
Nob Hill Road, Tamarac, Florida 3332 I.
<PAGE>
PART II
ITEM 1. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's shares of Common Stock are not registered with the U.S.
Securities and Exchange Commission under the Securities Act of 1933, as amended
(hereinafter referred to as the "Act"), and with the exception of certain shares
issued pursuant to Regulation D-504, are "restricted securities." A total of
2,000,000 shares are unrestricted, based on the Texas Securities Act, Section 5T
and Rule 109 3 (c), and the Missouri Uniform Securities Act, Section 30-54.215.
Since its inception June 17, 1999, the Company has not paid cash
dividends on its Common Stock. It is the present policy of the Company not to
pay cash dividends and to retain future earnings to support the Company's
growth. Any payments of cash dividends in the future will be dependent upon,
among other things, the amount of fund available therefor, the Company's
earnings, financial condition, capital requirements, and other factors which the
Board of Directors deem relevant.
As of September 30, 1999, there were 29 Common Shareholders of record.
ITEM 2. LEGAL PROCEEDINGS
The Company is not presently a party to any litigation, nor to the
knowledge of management is any litigation threatened against the Company, which
would materially affect the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
None.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
Private Placements.
In July, 1999, The Company completed an exempt placement of 2,000,000
shares of common stock, Pursuant to Rule 504, at a price of $0.001 per share for
a total of $2,000.00. There arc 28 shareholders, all of which hold less than 5%
of the shares.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Articles of Incorporation for the Company do contain provisions for
indemnification of the officers and directors; in addition, Section 78.75 I of
the Nevada General Corporation Laws provides as follows:
78.751 Indemnification of officers, directors, employees and agents; advance
of expenses.
1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorney's fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with the action, suit or proceeding if he acted in good faith and in
a manner which he 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 his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, of the corporation as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses, including amounts
paid in settlement and attorneys' fees actually and reasonably incurred by him
in connection with the defense or settlement of the action or suit if lie acted
in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation. Indemnification may not be
made for any claim, issue or matter as to which such a person has been adjudged
by a court of competent jurisdiction, after exhaustion of all appeals therefrom,
to be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsection I and 2, or in defense of
any claim, issue or matter therein, lie must be indemnified by the corporation
against expenses, including attorneys' fees, actually and reasonably incurred by
him in connection with the defense.
4. Any indemnification under subsections 1 and 2, unless ordered by a court
or advanced pursuant to subsection 5, must be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances. The
determination must he made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum
consisting of directors who were not parties to act, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors
who were not parties to the act, suit or proceeding so orders, by independent
legal counsel in a written opinion; or
(d) If a quorum consisting of directors who were not parties
to the act, suit or proceeding cannot be obtained, by independent legal counsel
in a written opinion; or
5. The articles of incorporation, the bylaws or an agreement made by the
corporation may provide that the expenses of officers and directors incurred in
defending a civil or criminal, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by
corporation. The provisions of this subsection do not affect any rights to
advancement of expenses to which corporate personnel other than the directors or
officers may' he entitled under any contract or otherwise by law.
6. The indemnification and advancement of expenses authorized in or ordered
by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the articles of
incorporation or any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, for either an action in his official capacity or an
action in another capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to subsection 2 or for the
advancement of expenses jade pursuant to subsection 5, may not be made to or on
behalf of any director or officer if a final adjudication establishes that his
act or omissions involved intentional misconduct, fraud or a knowing violation
of the law and was material to the cause of action.
(b) Continues for a person who has ceased to be a director,
officer, administrators of such person.
<PAGE>
PART F/S
FINANCIAL STATEMENTS
The Audited Financial Statement of the Company, prepared by Williams & Webster,
PS, Certified Public Accountants, Seafirst Financial Center, W. 601 Riverside,
Suite 1940, Spokane, WA 99201 required by Regulation S-X commence on page F/S
hereof in response to this Item 13 of this Registration Statement on Form 10SB
and are incorporated herein by this reference.
EXHIBITS
Exhibit 2 Charter & bylaws
Exhibit 2 (1) Articles of Incorporation
Exhibit 2 (2) By-Laws
Exhibit 3 Instruments defining rights of security holders
(see Exhibit 2)
Exhibit 5 Voting Trust agreement
(not applicable)
Exhibit 6 Material contracts
Exhibit 6 (1) Advisory ad Servicing Contract between Tom Cochran and J.
Thomas Howard, LTD
Exhibit 7 Material foreign patents
(not applicable)
Exhibit 12 Additional exhibits
(not applicable)
Exhibit 13 Canadian issuer's power of atty
(not applicable)
<PAGE>
SIGNATURE PAGE
Pursuant to the requirements of Section 12 of the securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: November 5, 1999
Healthcare Software, Inc.
By: /s/ Tom Cochran
------------------------
Tom Cochran, President
<PAGE>
HEALTHCARE SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
<PAGE>
WILLIAMS & WEBSTER PS
CERTIFIED PUBLIC ACCOUNTANTS
SEAFIRST FINANCIAL CENTER
W 601 RIVERSIDE, SUITE 1940
SPOKANE, WA 99201
(509) 838-5111
<PAGE>
HEALTHCARE SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS
Balance Sheet 2
Statement of Operations 3
Statement of Stockholders' Equity 4
Statement of Cash Flows 5
NOTES TO FINANCIAL STATEMENTS 6
<PAGE>
Board of Directors
Healthcare Software, Inc.
611 Mulberry Rd.
Celebration, Florida 34747
Independent Auditor's Report
We have audited the accompanying balance sheet of Healthcare Software, Inc. (a
development stage company) as of September 30, 1999 and the related statements
of operations, cash flows, and stockholders' equity for the period from June 17,
1999 (inception) through September 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, the financial statements referred to above present fairly, in
all material respects, the financial position of Healthcare Software, Inc. as of
September 30, 1999, and the results of its operations and its cash flows for the
period from June 17, 1999 (inception) to September 30, 1999, in conformity with
generally accepted accounting principles.
As discussed in Note 2, the Company has been in the development stage since its
inception and has no revenues. The Company's continued viability is dependent
upon the Company's ability to meet its future financing requirements and the
success of future operations. These factors raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans regarding
those matters are described in Note 2. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/s/ Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
October 19, 1999
1
<PAGE>
<TABLE>
<CAPTION>
HEALTHCARE SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
SEPTEMBER 30, 1999
<S> <C>
A S S E T S
CURRENT ASSETS
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,990
-------------
TOTAL CURRENT ASSETS. . . . . . . . . . . . . . . . . . . . . 1,990
-------------
TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,990
=============
L I A B I L I T I E S & S T O C K H O L D E R S ' E Q U I T Y
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . $ -
-------------
COMMITMENTS AND CONTINGENCIES . . . . . . . . . . . . . . . . . . -
-------------
STOCKHOLDER'S EQUITY
Common stock, 100,000,000 shares authorized,
$.0001 par value; 20,000,000 shares issued and outstanding. . 2,000
Additional paid-in capital. . . . . . . . . . . . . . . . . . . 80,000
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . (80,010)
-------------
TOTAL STOCKHOLDERS' EQUITY. . . . . . . . . . . . . . . . . . . 1,990
-------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY. . . . . . . . . . . $ 1,990
=============
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
HEALTHCARE SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
<S> <C>
R E V E N U E S . . . . . . . . . . . . . . . $ -
-------------
E X P E N S E S
Professional services 80,010
-------------
TOTAL OPERATING EXPENSES 80,010
-------------
NET LOSS $ (80,010)
=============
Basic and diluted net loss per common share $ NIL
=============
Weighted average number of
common stock shares outstanding 20,000,000
=============
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
HEALTHCARE SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
YEAR ENDED SEPTEMBER 30, 1999
Common Stock
-------------------- Total
Number Additional Accumulated Stockholders'
of Shares Amount Paid-in Capital Deficit Equity
---------- -------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Issuance of common stock in June 1999
for cash at an average of $.001 per share 2,000,000 $ 200 $ 1,800 $ - $ 2,000
Issuance of common stock to the president
of the Company at $.004 per common share. 18,000,000 1,800 78,200 - 80,000
Loss for period ending, September 30, 1999. - - - (80,010) (80,010)
---------- -------- --------------- ----------- -------------
Balance at September 30, 1999 . . . . . . 20,000,000 $ 2,000 $ 80,000 $ (80,010) $ 1,990
========== ======== =============== =========== =============
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
HEALTHCARE SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
SEPTEMBER 30, 1999
<S> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . . . . . . $ (80,010)
Direct payments for professional services by stockholder 80,000
-------------
Net cash used in operating activities. . . . . . . . . . (10)
-------------
Cash flows from investing activities:. . . . . . . . . . . -
-------------
Cash flows from financing activities:
Issuance of stock. . . . . . . . . . . . . . . . . . . . 2,000
-------------
Net cash provided by financing activities. . . . . . . . 2,000
-------------
Net increase in cash . . . . . . . . . . . . . . . . . . . 1,990
Cash, beginning of period. . . . . . . . . . . . . . . . . -
-------------
Cash, end of period. . . . . . . . . . . . . . . . . . . . $ 1,990
=============
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest and income taxes:
Interest . . . . . . . . . . . . . . . . . . . . . . . $ -
=============
Income taxes . . . . . . . . . . . . . . . . . . . . . $ -
=============
NON-CASH INVESTING AND FINANCING ACTIVITIES
Professional services paid directly by stockholder . . . $ 80,000
=============
</TABLE>
5
<PAGE>
HEALTHCARE SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Healthcare Software, Inc., (hereinafter "the Company"), was incorporated in June
1999 under the laws of the State of Nevada primarily for the purpose of
providing quality software for the hospital industry via the internet. At
September 30, 1999, the Company is operating from the residence of the Company's
president, in Celebration, Florida. The Company is expected to secure separate
office space in the near future.
The Company is in the development stage and as of September 30, 1999 had not
realized any significant revenues from its planned operations.
NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Healthcare Software, Inc. is
presented to assist in understanding the Company's financial statements. The
financial statements and notes are representations of the Company's management
which is responsible for their integrity and objectivity. These accounting
policies conform to generally accepted accounting principles and have been
consistently applied in the preparation of the financial statements.
Development Stage Activities
- ------------------------------
The Company has been in the development stage since its formation on June 17,
1999. It is primarily engaged in development and marketing of healthcare
software.
Going Concern
- --------------
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.
As shown in the accompanying financial statements, the Company has generated no
revenues since inception. The Company, being a developmental stage enterprise,
is currently putting technology in place which will, if successful, mitigate
these factors which raise substantial doubt about the Company's ability to
continue as a going concern. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded
assets, or the amounts and classification of liabilities that might be necessary
in the event the Company cannot continue in existence.
Management has established plans designed to increase the sales of the Company's
products. Management intends to seek new capital from new equity securities
issuances that will provide funds needed to increase liquidity, fund internal
growth and fully implement its business plan.
6
<PAGE>
HEALTHCARE SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cash and Cash Equivalents
- ----------------------------
The Company has only a demand deposit account. It does not have cash
equivalents at this time.
Accounting Method
- ------------------
The Company's financial statements are prepared using the accrual method of
accounting. Healthcare Software, Inc.'s year-end is December 31.
Loss Per share
- ----------------
The Company has adopted Statement of Financial Accounting Standards Statement
(SFAS) No. 128, Earnings Per Share. Basic earnings per share is computed using
the weighted average number of common shares outstanding. Diluted net loss per
share is the same as basic net loss per share as there are no common stock
equivalents to be included in the calculation.
Income Taxes
- -------------
No provision for taxes or tax benefit has been reported in the financial
statements, as there is not a measurable means of assessing future profits or
losses.
Year 2000
- ----------
The Company, like other firms, could be adversely affected if the computer
systems used by it, its suppliers or customers do not properly process and
calculate date-related information and data from the period surrounding and
including January 1, 2000. This is commonly known as the "Year 2000" issue.
Additionally, this issue could impact non-computer systems and devices such as
production equipment.
At this time, because of the complexities involved in the issue, management
cannot provide absolute assurances that the Year 2000 issue will not have an
impact on the Company's operations.
The Company has not purchased any software or hardware. When the Company does
purchase software and hardware, it will determine at that time if there could be
any adverse effects to the Company's operations regarding Year 2000 issues.
Management also believes that Year 2000 issues should not adversely affect the
ability of its clients and customers to conduct business with the Company. Any
costs associated with Year 2000 compliance will be expensed when incurred.
7
<PAGE>
HEALTHCARE SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED
Impaired Asset Policy
- -----------------------
The Company expects to review any long-lived assets quarterly to determine if
any events or changes in circumstances have transpired which indicate that the
carrying value of its assets may not be recoverable in accordance with standards
in SFAS No. 121.
NOTE 3 - PROPERTY AND EQUIPMENT
At September 30, 1999 the Company does not own any property or equipment. When
the Company does acquire property and equipment it expects to implement a policy
to determine impairment by comparing the undiscounted future cash flows
estimated to be generated by those assets to their respective carring amounts.
NOTE 5-COMMON STOCK
Upon incorporation, the Company authorized the issuance of 100,000,000 shares of
common stock at a par value of $0.0001 per share of which 20,000,000 shares are
outstanding. Holders of shares of common stock are entitled to one vote for
each share on all matters to be voted on by the stockholders, but have no
cumulative voting rights. Holders of shares of common stock are entitled to
share ratably in dividends, if any, as may be declared by the Board of Directors
in its discretion, from funds legally available therefor. The Company has not
authorized any preferred stock, convertible stock, warrants or options as of
September 30, 1999.
The president and director of the Company, Tom Cochran, owns 90% of the
outstanding common stock.
NOTE 6-RELATED PARTY
The Company issued 1,000,000 shares of common stock to companies under the
control of its key business consultant, J. Thomas Howard LTD., at $.001.
The Company issued stock to the president in exchange for expenses paid by the
president in the amount of $80,000. This was paid directly to J. Thomas Howard
LTD. to provide services related to the initial registration of the Company
under the Securities Act of 1934.
8
<PAGE>
Exhibit 2 (1) Page 3
ARTICLES OF INCORPORATION
FILED OF
JUN 17 1999 HEALTHCARE SOFTWARE, INC.
a Nevada Corporation
FIRST. The name of the corporation is:
- -----
HEALTHCARE SOFTWARE, INC.
SECOND. The resident agent for this corporation shall be:
- ------
SAGE INTERNATIONAL INC.
The address of said agent, and the principal or statutory address of this
corporation in the State of Nevada, shall be 1135 TERMINAL WAY, SUITE 209, RENO,
NEVADA 89502, located in WASHOE COUNTY, State of Nevada. This corporation may
maintain an office, or offices, in such other place within or without the State
of Nevada as may be from time to time designated by the Board of Directors, or
by the By-Laws of said corporation, and that this corporation may conduct all
corporation business of every kind and nature, including the holding of all
meetings of Directors and Stockholders, outside the State of Nevada as well as
within the State of Nevada.
THIRD. The objects for which this corporation is formed are as follows: to
- -----
engage in any lawful activity.
FOURTH. That the total number of voting common stock authorized that may be
- ------
issued by the corporation is ONE HUNDRED MILLION (100,000,000) shares of stock
with .0001 PAR VALUE, and no other class of stock shall be authorized. Said
shares may be issued by the corporation from time to time for such
considerations as may be fixed from time to time by the Board of Directors.
FIFTH. The governing board of this corporation shall be known as directors, and
- -----
the number of directors may from time to time be increased or decreased in such
manner as shall be provided by the bylaws of this corporation, providing that
the number of directors shall not be reduced to less than one (1). The name and
post office address of the first Board of Directors shall be one (1) in number
and listed as follows:
NAME POST OFFICE ADDRESS
--------------- -------------------------------
CHERI S. HILL 1135 TERMINAL WAY, SUITE 209
RENO, NEVADA 89502
1 of 3 pages.
<PAGE>
SIXTH. After the amount of the subscription price, the purchase price, of the
- -----
par value of the stock of any class or series is paid into the corporation,
owners or holders of shares of any stock in the corporation may never be
assessed to pay the debts of the corporation.
SEVENTH. The name and post office address of the Incorporator signing the
- -------
Articles of Incorporation is as
follows:
NAME POST OFFICE ADDRESS
--------------- -------------------------------
CHERI S. HILL 1135 TERMINAL WAY, SUITE 209
RENO, NEVADA 89502
EIGHTH. The corporation is to have a perpetual existence.
- ------
NINTH. No director or officer of the corporation shall be personally liable to
- -----
the corporation or any of its stockholders for damages for breach of fiduciary
duty as a director or officer or for any act or omission of any such director or
officer; however, the foregoing provision shall not eliminate or limit the
liability of a director or officer for (a) acts or omissions which involve
intentional misconduct, fraud or a knowing violation of law; or (b) the payment
of dividends in violation of Section 78.3 00 of the Nevada Revised Statutes. Any
repeal or modification of this Article by the stockholders of this corporation
shall be prospective only and shall not adversely affect any limitation on the
personal liability of a director or officer of the corporation for acts or
omissions prior to such repeal or modification.
TENTH. No shareholder shall be entitled as a matter of right to subscribe for or
- -----
receive additional shares of any class of stock of the corporation, whether now
or hereafter authorized, or any bonds, debentures or securities convertible into
stock, but such additional shares of stock or other securities convertible into
stock may be issued or disposed of by the Board of Directors to such persons and
on such terms as in its discretion it shall deem advisable.
ELEVENTH. This corporation reserves the right to amend, alter, change or repeal
- --------
any provision contained in the Articles of Incorporation, in the manner now or
hereafter prescribed by statute, or by the Articles of Incorporation, and all
rights conferred upon Stockholders herein are granted subject to this
reservation.
2 of 3 pages.
<PAGE>
I, THE UNDERSIGNED, being the Incorporator hereinbefore named for the purpose of
forming a corporation pursuant to the General Corporation Laws of the State of
Nevada, do make and file these Articles of Incorporation, hereby declaring and
certifying the facts herein stated are true, and accordingly have hereunto set
my hand June 10, 1999.
/s/ Cheri S. Hill
CHERI S. HILL, Incorporator
STATE OF NEVADA
COUNTY OF WASHOE
On June 10, 1999, before me, the undersigned, a Notary Public in and for said
County and State, personally appeared CHERI S. HILL, personally known to me to
be the person whose name is subscribed to the foregoing document and
acknowledged to me that she executed the same.
/s/ V.R. Sweet
V. R. SWEET
NotaryPublic-State of Nevada I Appointment Recorded in Washoe County
NO. 93-4205-2 - EXPIRES AUG. 1, 2001
CERTIFICATE OF ACCEPTANCE OF
APPOINTMENT BY RESIDENT AGENT
SAGE INTERNATIONAL, INC., hereby accepts appointment as Resident Agent of
Healthcare Software, Inc. in accordance with NRS 78.090.
SAGE INTERNATIONAL, INC.
/s/ Cheri S. Hill Date: June 10, 1999.
CHERI S. HILL, Senior V.P.
3 of 3 pages.
<PAGE>
TABLE OF CONTENTS
BY-LAWS
ARTICLE ONE - OFFICES
1.1 Registered Office.
1.2 Other Offices.
ARTICLE TWO - MEETINGS OF STOCKHOLDERS
2.1 Place.
2.2 Annual Meetings.
2.3 Special Meetings.
2.4 Notices of Meetings.
2.5 Purpose of Meetings.
2.6 Quorum.
2.7 Voting.
2.8 Share Voting.
2.9 Proxy.
2.10 Written Consent in Lieu of Meeting.
ARTICLE - THREE - DIRECTORS
3.1 Powers.
3.2 Number of Directors.
3.3 Vacancies.
ARTICLE FOUR - MEETINGS OF THE BOARD OF DIRECTORS
4.1 Place.
4.2 First Meeting.
4.3 Regular Meetings.
4.4 Special Meetings.
4.5 Notice.
4.6 Waiver.
4.7 Quorum.
4.8 Adjournment.
ARTICLE FIVE - COMMITTEES OF DIRECTORS
5.1 Power to Designate.
5.2 Regular Minutes.
5.3 Written Consent.
ARTICLE SIX - COMPENSATION OF DIRECTORS
6.1 Compensation.
ARTICLE SEVEN - NOTICES
7.1 Notice.
7.2 Consent.
7.3 Waiver of Notice.
ARTICLE EIGHT - OFFICERS
8.1 Appointment of Officers.
8.2 Time of Appointment.
8.3 Additional Officers.
8.4 Salaries.
8.5 Vacancies.
8.6 Chairman of the Board.
8.7 Vice-Chairman.
8.8 President.
8.9 Vice-President.
8.10 Secretary.
8.11 Assistant Secretaries.
8.12 Treasurer.
8.13 Surety.
8.14 Assistant Treasurer.
ARTICLE NINE - CERTIFICATES OF STOCK
9.1 Share Certificates.
9.2 Transfer Agents.
9.3 Lost or Stolen Certificates.
9.4 Share Transfers.
9.5 Voting Shareholder.
9.6 Shareholders Record.
ARTICLE TEN - GENERAL PROVISIONS
10.1 Dividends.
10.2 Reserves.
10.3 Checks.
10.4 Fiscal Year.
10.5 Corporate Seal.
ARTICLE ELEVEN - INDEMNIFICATION
ARTICLE TWELVE - AMENDMENTS
12.1 By Shareholder.
12.2 By Board of Directors.
<PAGE>
BY-LAWS
OF
Healthcare Software, Inc.
A NEVADA CORPORATION
ARTICLES ONE
------------
OFFICES
-------
Section 1.1. Registered Office - The registered office of this corporation
-----------------
shall be in the County of Washoe ,State of Nevada.
------ -
Section 1.2. Other Offices -The corporation may also have offices
---------------
at such other places both within and without the State of Nevada as the Board of
Directors may from time to time determine or the business of the corporation may
require.
ARTICLE TWO
-----------
MEETINGS OF STOCKHOLDERS
------------------------
Section 2.1 Place -All annual meetings of the stockholders shall
-------
be held at the registered office of the corporation or at such other place
within or without the State of Nevada as the directors shall determine. Special
meetings of the stockholders may be held at such time and place within or
without the State of Nevada as shall be stated in the notice of the meeting, or
in a duly executed waiver of notice thereof.
Section 2.2 Annual Meetings - Annual meetings of the
----------------
stockholders, commencing with the year 2000, shall be held on the 1st day of
July each year if not a legal holiday and, if a legal holiday, then on the next
secular day following, or at such other time as may be set by the Board of
Directors from time to time, at which the stockholders shall elect by vote a
Board of Directors and transact such other business as may properly be brought
before the meeting.
Section 2.3 Special Meetings - Special meetings of the stockholders,
----------------
for any purposes or purposes, unless otherwise prescribed by statute or by the
Articles of Incorporation, may be called by the President or the Secretary by
resolution of the Board of Directors or at the request in writing of
stockholders owning a majority in amount of the entire capital stock of the
corporation issued and outstanding and entitled to vote. Such request shall
state the purpose of the proposed meeting.
Section 2.4 Notice of Meetings - Notices of meetings shall be in
--------------------
writing and signed by the President or a Vice-President or the Secretary or an
Assistant Secretary or by such other person or persons as the directors shall
designate. Such notice shall state the purpose or purposes for which the meeting
is called and the time and the place, which may be within or without thisState,
where it is to be held. A copy of such notice shall be either delivered
personally to or shall be mailed, postage prepaid to each stockholder of record
entitled to vote at such meeting not less than ten nor more than sixty days
before such meeting. If mailed, it shall be directed to a stockholder at his
address as it appears upon the records of the corporation and upon such mailing
of any such notice, the service thereof shall be complete and the time of the
notice shall being to run from the date upon which such notice is deposited in
the mail for transmission to such stockholder. Personal delivery of any such
notice to any officer of a corporation or association or to any member of a
partnership shall constitute delivery of such notice to such corporation,
association or partnership. In the event of the transfer of stock after delivery
of such notice of and prior to the holding of the meeting it shall not be
necessary to deliver or mail notice of the meeting to the transferee.
Section 2.5. Purpose of Meetings - Business transacted at any special
----------- --------
meeting of stockholders shall be limited to the purposes stated in the notice.
Section 2.6. Quorum - The holders of a majority of the stock issued
------
and outstanding and entitled to vote thereat, present in person or represented
by proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
Articles of Incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
notified.
Section 2.7. Voting - When a quorum is present or represented at any
------
meeting, the vote of the holders of a majority of the stock having voting power
present in person or represented by proxy shall be sufficient to elect directors
or to decide any questions brought before such meeting, unless the question is
one upon which by express provision of the statutes or of the Articles of
Incorporation, a different vote is required in which case such express provision
shall govern and control the decision of such question.
Section 2.8. Share Voting - Each stockholder of record of the
-------------
corporation shall be entitled at each meeting of stockholders to one vote for
each share of stock standing in his name on the books of the corporation. Upon
the demand of any stockholder, the vote for directors and the vote upon any
question before the meeting shall be by ballot.
Section 2.9. Proxy - At any meeting of the stockholders any
-----
stockholder may be represented and vote by a proxy or proxies appointed by an
instrument in writing. In the event that any such instrument in writing shall
designate two or more persons to act as proxies, a majority of such persons
present at the meeting, or, if only one shall be present, then that one shall
have and may exercise all of the powers conferred by such written instrument
upon all of the persons so designated unless the instrument shall otherwise
provide. No proxy or power of attorney to vote shall be used to vote at a
meeting of the stockholders unless it shall have been filed with the secretary
of the meeting when required by the inspectors of election. All questions
regarding the qualification of voters, the validity of proxies and the
acceptance or rejection of votes shall be decided by the inspectors of election
who shall be appointed by the Board of Directors, or if not so appointed, then
by the presiding officer of the meeting.
Section 2.10. Written Consent in Lieu of Meeting - Any action which may be
----------------------------------
taken by the vote of the stockholders at a meeting may be taken without a
meeting if authorized by the written consent of stockholders holding at least a
majority of the voting power. unless the provisions of the statutes or of the
Articles of Incorporation require a greater proportion of voting power to
authorize such action in which case such greater proportion of written consents
shall be required.
<PAGE>
ARTICLE THREE
------- -----
DIRECTORS
---------
Section 3.1. Powers - The business of the corporation shall be managed
------
by its Board of Directors which may exercise all such powers of the corporation
and do all such lawful acts and things as are not by statute or by the Articles
of Incorporation or by these Bylaws directed or required to be exercised or done
by the stockholders.
Section 3.2. Number of Directors - The number of directors which shall
-------------------
constitute the whole board shall be 1. The number of directors may from time to
time be increased or decreased to not less than one nor more than fifteen by
action of the Board of Directors. The directors shall be elected at the annual
meeting of the stockholders and except as provided in Section 2 of this Article,
each director elected shall hold office until his successor is elected and
qualified. Directors need not be stockholders.
Section 3.3. Vacancies - Vacancies in the Board of Directors including
---------
those caused by an increase in the number of directors, may be filled by a
majority of the remaining directors, though less than a quorum, or by a sole
remaining director, and each director so elected shall hold office until his
successor is elected at an annual or a special meeting of the stockholders. The
holders of a two-thirds of the outstanding shares of stock entitled to vote may
at any time peremptorily terminate the term of office of all or any of the
directors by vote at a meeting called for such purpose or by a written statement
filed with the secretary or, in his absence, with any other officer. Such
removal shall be effective immediately, even if successors are not elected
simultaneously and the vacancies on the Board of Directors resulting therefrom
shall be filled only by the stockholders.
A vacancy or vacancies in the Board of Directors shall be deemed to
exist in case of the death, resignation or removal of any directors, or if the
authorized number of directors be increased, or if the stockholders fail at any
annual or special meeting of stockholders at which any director or directors are
elected to elect the full authorized number of directors to be voted for at that
meeting.
The stockholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors. If the Board of Directors
accepts the resignation of a director tendered to take effect at a future time,
the Board or the stockholders shall have power to elect a successor to take
office when the resignation is to become effective.
No reduction of the authorized number of directors shall have the
effect of removing any director prior to the expiration of his term of office.
<PAGE>
ARTICLE FOUR
------- ----
MEETINGS OF THE BOARD OF DIRECTORS
-------- -- --- ----- -- ---------
Section 4.1. Place - Regular meetings of the Board of Directors shall
-----
be held at any place within or without the State which has been designated from
tune to time by resolution of the Board or by written consent of all members of
the Board. In the absence of such designation regular meetings shall be held at
the registered office of the corporation. Special meetings of the Board may be
held either at a place so designated or at the registered office.
Section 4.2. First Meeting - The first meeting of each newly elected
-------------
Board of Directors shall be held immediately following the adjournment of the
meeting of stockholders and at the place thereof. No notice of such meeting
shall be necessary to the directors in order legally to constitute the meeting,
provided a quorum be present. In the event such meeting is not so held, the
meeting may be held at such time and place as shall be specified in a notice
given as hereinafter provided for special meetings of the Board of Directors.
Section 4.3. Regular Meetings - Regular meetings of the Board of
--------------------
Directors may be held without call or notice at such time and at such place as
shall from time to time be fixed and determined by the Board of Directors.
Section 4.4. Special Meetings - Special Meetings of the Board of
-----------------
Directors may be called by the Chairman or the President or by any
Vice-President or by any two directors.
Written notice of the time and place of special meetings shall be
delivered personally to each director, or sent to each director by mail or by
other form of written communication, charges prepaid, addressed to him at his
address as it is shown upon the records or is not readily ascertainable, at the
place in which the meetings of the directors are regularly held. In case such
notice is mailed or telegraphed, it shall be deposited in the United States mail
or delivered to the telegraph company at lease forty-eight (48) hours prior to
the time of the holding of the meeting. In case such notice is delivered as
above provided, it shall be so delivered at lease twenty-four (24) hours prior
to the time of the holding of the meeting. Such mailing, telegraphing or
delivery as above provided shall be due, legal and personal notice to such
director.
Section 4.5. Notice - Notice of the time and place of holding an
------
adjourned meeting need not be given to the absent directors if the time and
place be fixed at the meeting adjourned.
Section 4.6. Waiver - The transactions of any meeting of the Board -of
------
Directors, however called and noticed or wherever held, shall be as valid as
though had at a meeting duly held after regular call and notice, if a quorum be
present, and if, either before or after the meeting, each of the directors not
present signs a written waiver of notice, or a consent to holding such meeting,
or an approval of the minutes thereof. All such waivers, consents or approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.
Section 4.7. Quorum - A majority of the authorized number of
------
directors shall be necessary to constitute a quorum for the transaction of
business, except to adjourn as hereinafter provided. Every act or decision done
or made by a majority of the directors present at a meeting duly held at which a
quorum is present shall be regarded as the act of the Board of Directors, unless
a greater number be required by law or by the Articles of Incorporation. Any
action of a majority, although not at a regularly called meeting, and the record
thereof, if assented to in writing by all of the other members of the Board
shall be as valid and effective in all respects as if passed by the Board in
regular meeting.
Section 4.8. Adjournment - A quorum of the directors may adjourn any
-----------
directors meeting to meet again at a stated day and hour; provided, however,
that in the absence of a quorum, a majority of the directors present at any
directors meeting, either regular or special, may adjourn from time to time
until the time fixed for the next regular meeting of the Board.
ARTICLE FIVE
------- ----
COMMITTEES OF DIRECTORS
---------- -- ---------
Section 5.1. Power to Designate -The Board of Directors may, by
-----------------------
resolution adopted by a majority of the whole Board, designate one or more
committees of the Board of Directors, each committee to consist of one or more
of the directors of the corporation which, to the extent provided in the
resolution, shall have and may exercise the power of the Board of Directors in
the management of the business and affairs of the corporation and may have power
to authorize the seal of the corporation to be affixed to all papers which may
require it. Such committee or committees shall have such name or names as may be
determined from time to time by the Board of Directors. The members of any such
committee present at any meeting and not disqualified from voting may, whether
or not they constitute a quorum, unanimously appoint another member of the Board
of Directors to act at the meeting in the place of any absent or disqualified
member. At meetings of such committees, a majority of the members or alternate
members shall constitute a quorum for the transaction of business, and the act
of a majority of the members or alternate members at any meeting at which there
is a quorum shall be the act of the committee.
Section 5.2. Regular Minutes - The committees shall keep regular
----------------
minutes of their proceedings and report the same to the Board of Directors.
Section 5.3. Written Consent - Any action required or permitted to be
---------------
taken at any meeting of the Board of Directors or of any committee thereof may
be taken without a meeting if a written consent thereto is signed by all members
of the Board of Directors or of such committee, as the case may be, and such
written consent is filed with the minutes of proceedings of the Board or
committee.
ARTICLE SIX
-----------
COMPENSATION OF DIRECTORS
------------ -- ---------
Section 6.1. Compensation - The directors may be paid their expenses
------------
of attendance at each meeting of the Board of Directors and may be paid a fixed
sum for attendance at each meeting of the Board of Directors or a stated salary
as director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like reimbursement and
compensation for attending committee meetings.
<PAGE>
ARTICLE SEVEN
-------------
NOTICES
-------
Section 7.1. Notice - Notices to directors and stockholders shall be
------
in writing and delivered personally or mailed to the directors or stockholders
at their addresses appearing on the books of the corporation. Notice by mail
shall be deemed to be given at the time when the same shall be mailed. Notice to
directors may also be given by telegram.
Section 7.2. Consent - Whenever all parties entitled to vote at any
-------
meeting, whether of directors or stockholders, consent, either by a writing on
the records of the meeting or filed with the secretary, or by presence at such
meeting and oral consent entered on the minutes, or by taking part in the
deliberations at such meeting without objection, the doings of such meetings
shall be as valid as if had at a meeting regularly called and noticed, and at
such meeting any business may be transacted which is not excepted from the
written consent or to the consideration of which no objection for want of notice
is made at the time, and if any meeting be irregular for want of notice or of
such consent, provided a quorum was present at such meeting, the proceedings of
said meeting may be ratified and approved and rendered likewise valid and the
irregularity or defect therein waived by a writing signed by all parties having
the right to vote at such meeting; and such consent or approval of stockholders
may be by proxy or attorney, but all such proxies and powers of attorney must be
in writing.
Section 7.3. Waiver of Notice - Whenever any notice whatever is
------------------
required to be given under the provisions of the statutes, of the Articles of
Incorporation or of these Bylaws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
ARTICLE EIGHT
------- -----
OFFICERS
--------
Section 8.1. Appointment of Officers - The officers of the corporation
-------------- --------
shall be chosen by the Board of Directors and shall be a President, a Secretary
and a Treasurer. Any person may hold two or more offices.
Section 8.2. Time of Appointment -The Board of Directors at its first
------- -------------
meeting after each annual meeting of stockholders shall choose a Chairman of the
Board who shall be a director, and shall choose a President, a Secretary and a
Treasurer, none of whom need be directors.
Section 8.3. Additional Officers - The Board of Directors may appoint
-------------------
a Vice-Chairman of the Board, Vice-Presidents and one or more Assistant
Secretaries and Assistant Treasurers and such other officers and agents as it
shall deem necessary who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board of Directors.
Section 8.4. Salaries - The salaries and compensation of all officers
--------
of the corporation shall be fixed by the Board of Directors.
Section 8.5. Vacancies - The officers of the corporation shall hold
---------
office at the pleasure of the Board of Directors. Any officer elected or
appointed by the Board of Directors may be removed at any time by the Board of
Directors. Any vacancy occurring in any office of the corporation by death,
resignation, removal or otherwise shall be filled by the Board of Directors.
Section 8.6. Chairman of the Board - The Chairman of the Board shall
----------- --------- ----------- ---------
preside at meetings of the stockholders and the Board of Directors, and shall
see that all orders and resolutions of the Board of Directors are carried into
effect.
Section 8.7. Vice-Chairman - The Vice-Chairman shall, in the absence
------------- -------------
or disability of the Chairman of the Board, perform the duties and exercise the
powers of the Chairman of the Board and shall perform such other duties as the
Board of Directors may from time to time prescribe.
Section 8.8. President - The President shall be the chief executive
--------- ---------
officer of the corporation and shall have active management of the business of
the corporation. He shall execute on behalf of the corporation all instruments
requiring such execution except to the extent the signing and execution thereof
shall be expressly designated by the Board of Directors to some other officer or
agent of the corporation.
Section 8.9. Vice-President - The Vice-President shall act under the
-------------- --------------
direction of the President and in the absence or disability of the President
shall perform the duties and exercise the powers of the President. They shall
perform such other duties and have such other powers as the President or the
Board of Directors may from time to time prescribe. The Board of Directors may
designate one or more Executive Vice-Presidents or may otherwise specify the
order of seniority of the Vice-Presidents. The duties and powers of the
President shall descend to the Vice-Presidents in such specified order of
seniority.
Section 8.10. Secretary - The Secretaryshall act under the direction
--------- ---------
of the President. Subject to the direction of the President he shall attend all
meetings of the Board of Directors and all meetings of the stockholders and
record the proceedings. He shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the President or the Board of
Directors.
Section 8.11. Assistant Secretaries - The Assistant Secretaries shall
--------------------- ---------------------
act under the direction of the President. In order of their seniority, unless
otherwise determined by the President or the Board of Directors, they shall, in
the absence or disability of the Secretary, perform the duties and exercise the
powers of the Secretary. They shall perform such other duties and have such
other powers as the President or the Board of Directors may from time to time
prescribe.
Section 8.12. Treasurer - The Treasurer shall act under the direction
--------- ---------
of the President. Subject to the direction of the President he shall have
custody of the corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the corporation and
shall deposit all monies and other valuable effects in the name and to the
credit of the corporation in such depositories as may be designated by the Board
of Directors. He shall disburse the funds of the corporation as may be ordered
by the President or the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as Treasurer and of the financial condition of the
corporation.
<PAGE>
Section 8.13. Surety - If required by the Board of Directors, he shall
------
give the corporation a bond in such sum and with such surety or sureties as
shall be satisfactory to the Board of Directors for the faithful performance of
the duties of his office and for the restoration to the corporation, in case of
his death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.
Section 8.14. Assistant Treasurer - The Assistant Treasurer in the
-------------------- -------------------
order of their seniority, unless otherwise determined by the President or the
Board of Directors, shall, in the absence or disability of the Treasurer,
perform the duties and exercise the powers of the Treasurer. They shall perform
such other duties and have such other powers as the President or the Board of
Directors may from time to time prescribe.
ARTICLE NINE
------- ----
CERTIFICATES OF STOCK
--------------- -----
Section 9.1. Share Certificates - Every stockholder shall be entitled
------------------
to have a certificate signed by the President or a Vice-President and the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary
of the corporation, certifying the number of shares owned by him in the
corporation. If the corporation shall be authorized to issue more than once
class of stock or more than one series of any class, the designations,
preferences and relative, participating, optional or other special rights of the
various classes of stock or series thereof and the qualifications, limitations
or restrictions of such rights, shall be set forth in full or summarized on the
face or back of the certificate which the corporation shall issue to represent
such stock.
Section 9.2. Transfer Agents - If a certificate is signed (a) by a
----------------
transfer agent other than the corporation or its employees or (b) by a registrar
other than the corporation or its employees, the signatures of the officers of
the corporation may be facsimiles. In case any officer who has signed or whose
facsimile signature has been placed upon a certificate shall cease to be such
officer before such certificate is issued, such certificate may be issued with
the same effect as though the person had not ceased to be such officer. The seal
of the corporation, or a facsimile thereof, may, but need not be. affixed to
certificates of stock.
Section 9.3. Lost or Stolen Certificates - The Board of Directors may
---------------------------
direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the corporation alleged to
have been lost or destroyed upon the making of an affidavit o that fact by the
person claiming the certificate of stock to be lost or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the corporation
with respect to the certificate alleged to have been lost or destroyed.
Section 9.4. Share Transfers - Upon surrender to the corporation or
----------------
the transfer agent of the corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation, if it is satisfied that all
provisions of the laws and regulations applicable to the corporation regarding
transfer and ownership of shares have been complied with, to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
<PAGE>
Section 9.5. Voting Shareholder - The Board of Directors may fix in
-------------------
advance a date not exceeding sixty (60) days nor less than ten (10) days
preceding the date of any meeting of stockholders, or the date for the payment
of any dividend, or the date for the allotment of rights, or the date when any
change or conversion or exchange of capital stock shall go into effect, or a
date in connection with obtaining the consent of stockholders for any purpose,
as a record date for the determination of the stockholders entitled to notice of
and to vote at any such meeting, and any adjournment thereof, or entitled to
receive payment of any such dividend, or to give such consent, and in such case,
such stockholders, and only such stockholders as shall be stockholder of record
on the date so fixed, shall be entitled to notice of and to vote at such
meeting, or any adjournment thereof, or to receive payment of such dividend, or
to receive such allotment of rights, or to exercise such rights, or to give such
consent, as the case may be, notwithstanding any transfer of any stock on the
books of the corporation after any such record date fixed as aforesaid.
Section 9.6. Shareholders Record - The corporation shall be entitled
-------------------
to recognize the person registered on its books as the owner of shares to be the
exclusive owner for all purposes including voting and dividends, and the
corporation shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as other wise provided by
the laws of Nevada.
ARTICLE TEN
------- ---
GENERAL PROVISIONS
------- ----------
Section 10.1. Dividends - Dividends upon the capital stock of the
---------
corporation, subject to the provisions of the Articles of Incorporation, if any,
may be declared by the Board of Directors at any regular or special meeting,
pursuant to law. Dividends may be paid in cash, in property or in shares of the
capital stock, subject to the provisions of the Articles of Incorporation.
Section 10.2. Reserves - Before payment of any dividend, there may be
--------
set aside out of any funds of the corporation available for dividends such sum
or sums as the directors from time to tune, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends or for repairing or maintaining any property of the corporation or for
such other purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
Section 10.3. Checks - All checks or demands for money and notes of
------
the corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time designate.
Section 10.4. Fiscal Year - The fiscal year of the corporation shall
-----------
be fixed by resolution of the Board of Directors.
Section 10.5. Corporate Seal - The corporation may or may not have a
--------------
corporate seal, as may from time to time be determined by resolution of the
Board of Directors. If a corporate seal is adopted, it shall have inscribed
thereon the name of the Corporation and the words "Corporate Seals" and
"Nevada". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any manner reproduced.
<PAGE>
ARTICLE ELEVEN
------- ------
INDEMNIFICATION
---------------
Every person who was or is a party or is threatened to be made a party
to or is involved in any action, Suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he or a person of
whom he is the legal representative is or was a director or officer of the
corporation or is or was serving at the request of the corporation or for its
benefit as a director or officer of another corporation, or as its
representative in a partnership. joint venture, trust or other enterprise, shall
be indemnified and held harmless to the fullest extent legally permissible under
the General Corporation Law of the State of Nevada from time to time against all
expenses, liability and loss (including attorneys' fees, judgments, fines and
amounts paid or to be paid in settlement) reasonably incurred or suffered by him
in connection therewith. The expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. Such right of indemnification shall be a contract right which may
be enforced in any manner desired by such person. Such right of indemnification
shall not be exclusive of any other right which such directors, officers or
representatives may have or hereafter acquire and, without limiting the
generality of such statement, they shall be entitled to their respective rights
of indemnification under any bylaw, agreement, vote of stockholders, provision
of law or otherwise, as well as their rights under this Article.
The Board of Directors may cause the corporation to purchase and
maintain insurance on behalf of any person who is or was a director or officer
of the corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, or as its representative in a
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred in any such capacity or arising out of
such status, whether or not the corporation would have the power to indemnify
such person.
The Board of Directors may from time to time adopt further Bylaws
with respect to indemnification and may amend these and such Bylaws to provide
at all times the fullest indemnification permitted by the General Corporation
Law of the State of Nevada.
<PAGE>
ARTICLE TWELVE
------- ------
AMENDMENTS
----------
Section 12.1. By Shareholder -The Bylaws may be amended by a
------------------
majority vote of all the stock issued and outstanding and entitled to vote at
any annual or special meeting of the stockholders, provided notice of intention
to amend shall have been contained in the notice of the meeting.
Section 12.2. By Board of Directors - The Board of Directors by a
---------------------
majority vote of the whole Board at any meeting may amend these Bylaws,
including Bylaws adopted by the stockholders, but the stockholders may from time
to time specify particular provisions of the Bylaws which shall not be amended
by the Board of Directors.
APPROVED AND ADOPTED this 1st day of July, 1999.
/s/ James T. Howard
James T. Howard
Secretary
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CERTIFICATE OF SECRETARY
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I hereby certify that I am the Secretary of Healthcare Software, Inc.
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and that the foregoing Bylaws consisting of 13 pages, constitute the code of
Bylaws of Healthcare Software, Inc., as duly adopted at a regular meeting of the
Board of Directors of the corporation held on July 1, 1999.
IN WITNESS WHEREOF, I have hereunto subscribed my name this 1st
day of July, l999.
/S
James T. Howard
Secretary
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Exhibit 6 (1) Page 5
REVISED
ADVISORY AND SERVICING AGREEMENT
This Advisory and Servicing Agreement (this "Agreement") is entered into as
of June 10, 1999, by and between Thomas Cochran, and individual, having his/hers
principal place of business at 1140 Gravois Rd., St. Louis, MO 63126 (the
"Client") and J. Thomas Howard, LTD, a Missouri LLC, having its principal place
of business at 301 West Armour Blvd. Suite 1000, Kansas City, MO 64111 ("JTHL")
WITNESSETH:
A. The Client intends to have established a publicly held corporation to be
traded on the OTC Bulletin Board, to complete a merger agreement or stock
acquisition of the Company as more specifically described on Exhibit A attached
hereto and incorporated herein by this reference (the "Public Company"), which
Public Company will be in the business to assist hospitals automate their
operations and to increase efficiencies within the hospital.
B. JTHL, through its management and staff, is experienced in the areas of
starting up publicly held companies to be traded on the OTC Bulletin Board, and
possesses adequate personnel and contacts to advise and perform certain other
services for the Company with regard to the organization of the Public Company.
C. The Company desires to avail itself of the experience, advice and
assistance of JTHL and to have JTHL undertake the duties and responsibilities
hereinafter set forth.
D. JTHL is willing to render such services for the compensation and in
accordance with the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. ENGAGEMENT: Client hereby engages JTHL and JTHL hereby agrees to render
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advisory and other services for the Company, to the best of its ability,
including, without limitation, the following:
(a) assisting and advising the Company with regard to the corporate
structure of the Public Company, including, without limitation, providing
Articles of Incorporation, Bylaws, organizational corporate minutes; necessary
business licenses; obtaining transfer agent, printing and distribution of stock
certificates (the "Corporate Services")
(b) assisting in obtaining appropriate audited financial statements and tax
returns, if required (the "Financial Services"); and
(c) assisting the Company in preparing an Offering Memorandum under Section
504 of the Securities Exchange Act, together with all ancillary documentation,
including, without limitation, Form D; Form 10 registration preparation and
filing, obtaining a trading symbol and CUSIP number for the Public Company;
preparation of necessary offering circulars; preparation of necessary Blue Sky
("Securities Services").
Notwithstanding the foregoing, JTHL will not be required by the Company to take
any action or perform any services for which it must be registered with or
licensed by the Securities Exchange Commission, any State Bar association or any
state's securities commission.
2. TERM: JTHL agrees to have completed, or caused to be completed, all
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necessary activities in order that the Public Company will begin trading on the
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OTC Bulletin Board within One Hundred and eighty (180) days of the date of this
contract. In the event that the Public Company does not begin trading on the
OTC Bulletin Board on or before that date, JTHL will reimburse the Company for
all amounts previously paid by the Company to JTHL; provided, however, the
Company will remain responsible for the payment of all Third Party Professionals
and expenses (as those terms are defined herein); and provided further that the
Company has timely provided JTHL with all necessary information to perform the
services required hereunder.
3. THIRD PARTY PROFESSIONALS: The parties hereto acknowledge and agree that
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in order to provide the Corporate Services, the Financial Services and the
Securities Services, it will be necessary for JTHL to engage third party
professionals, including, without limitation, attorneys, corporation services
and accountants ("Third Party Professionals"). JTHL shall be responsible for
the payment of all Third Party Professionals and Expenses. Any professionals
retained by JTHL will be properly licensed and specialize in the area of
expertise that they have been engaged for, and same such said professionals will
not engage in any illegal activities that will jeopardize The Company or
shareholders.
4. COMPENSATION:
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As compensation for all services rendered by JTHL under this Agreement, the
Company shall pay JTHL a total of Eighty Thousand Dollars ($80,000) in the
following sums, in immediately available funds made payable to J. Thomas Howard
LTD:
(a) Twenty-Five Thousand Dollars ($25,000) due and payable upon signing of
this agreement: paid in full on May 20th, 1999, by check made payable to cash;
(b) Fifteen Thousand Dollars ($15,000) due and payable upon completion of
504 Memorandum; and
(c) Ten Thousand Dollars ($10,000) upon the completion of audit and
submittal of Form 10 Registration material to legal counsel for the filing of
the Form 10 Registration with the SEC; and
(d) Ten ($10,000) upon completion and filing of the 15c2-11 with NASD; and
(e) Twenty Thousand Dollars ($20,000) the first day stock is publicly traded
on the OTC Bulletin Board.
5. EXPENSES: Except as otherwise expressly indicated herein, JTHL shall be
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reimbursed by the Company for all reasonable out-of-pocket expenses incurred by
JTHL in obtaining services or products from any third party during the
performance of its services hereunder ("Expenses"). The company's obligation to
reimburse JTHL pursuant to this subparagraph shall be subject to the
presentation to Company by JTHL of an itemized account of such expenditures,
together with supporting vouchers, in accordance with Company's policies as in
effect from time to time.
6. DEFAULT: In the event that the Company shall default in the payment of
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any of the payments outlined in Paragraph 4 above, JTHL, may, but shall not be
obligated to, terminate this Agreement and retain all amounts paid to JTHL prior
to said date of termination. In addition, the Company shall assign to JTHL, or
its nominees, all of the Company's right, title and interest in the Public
Company as of the date of termination.
7. INDEPENDENT CONTRACTOR: It is expressly agreed that JTHL is acting as an
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independent contractor in performing its services hereunder. Company shall not
pay any contributions to Social Security, unemployment insurance, federal or
state withholding taxes, nor provide any other contributions or benefits, which
might be expected in an employer-employee relationship.
8. ASSIGNMENt: This Agreement is a personal one, being entered into in
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reliance upon and in consideration of the singular skill and qualifications of
JTHL. JTHL shall therefore not voluntarily or by operation of law assign or
otherwise transfer the obligations incurred on its part pursuant to the terms of
this Agreement without the prior written consent of Company. Any attempted
assignment or transfer by JTHL of its obligation without such consent shall be
wholly void.
9. MODIFICATION OF AGREEMENT: This Agreement may be modified by the parties
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hereto only by a written supplemental agreement executed by both parties.
10. NOTICE: Any notice required or permitted to be given hereunder shall be
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sufficient if in writing, and if sent by registered or certified mail, postage
prepaid, addressed as follows:
If to Client: Thomas Cochran
1140 Gravois Rd
St. Louis, Missouri 63126
If to JTHL: J. Thomas Howard, LTD
301 West Armour Blvd. Suite 1000
Kansas City, MO 64111
With a copy to: McDowell, Rice, Smith & Gaar
605 West 47th Street, Suite 350
Kansas City, Missouri 64112
Attention: R. Pete Smith
Or to such other address as the parties hereto may specify, in writing, from
time to time.
11. WAIVER OF BREACH: This waiver by either party of any breach of any
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provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
12. ARBITRATION: Any and all disputes and controversies arising out of, or
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in any manner relating to permanent performance of this Agreement which cannot
be settled by an agreement between the parties hereto, shall be submitted to and
settled by arbitration in the state of Missouri in accordance with the rules of
the American Arbitration Association, and judgment upon any arbitration award
may be entered in any court having jurisdiction.
13. TITLES: The titles of the Sections herein are for convenience of
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reference only and are not to be considered in construing this Agreement.
14. GOVERNING LAW: This Agreement has been executed and delivered in the
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State of Missouri and its interpretation, validity and performance shall be
construed and enforced in accordance with the laws of such State.
15. SEVERABILITY: If any provision of this Agreement or the application of
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any provision to any person or circumstances is held invalid or unenforceable,
the remainder hereof and the application of the remainder hereof to other
persons or circumstances shall remain valid and enforceable.
16. INDEMNIFICATION: The parties hereto hereby remise, release and forever
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discharge the other and their respective officers, directors, agents, servants,
employees, attorneys, subsidiaries, affiliates, successors, assigns and any
firm, organization, corporation, partnership, entity or person liable by,
through, under or on behalf of them, from any and all liability, actions,
contracts, indebtedness, obligations, claims, causes of action, suits, damages,
demands, costs and expenses whatsoever, of every kind and nature, known or
unknown, disclosed or undisclosed, whether or not known or contemplated, whether
in law or in equity, arising out of any act, omission or transaction that has
happened, occurred or arisen prior to and including the date of this Agreement.
Further, the parties hereto hereby agree to indemnify and hold harmless the
other and their respective agents, employees, directors and officers from and
against any and all liability, loss, cost, damage, claim, counterclaims, actions
and causes of action and all costs and expenses related thereto (including but
not limited to attorneys' fees and court costs) that the other and/or its
agents, employees, directors and officers have now incurred or may hereafter
suffer or incur arising out of or in any way related to the execution of this
Agreement and the performance by it of its functions under this Agreement.
17. BINDING AGREEMENT: This Agreement shall be binding upon and shall inure
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to the benefit of the respective legal representatives, successors and assigns
of the parties hereto.
18. ENTIRE AGREEMENT: This Agreement contains the entire contract of the
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parties with respect to the subject matter hereof and supersedes all agreements
and understandings between the parties concerning the subject matter hereof.
19. SUPERCEDES: This agreement supercedes all prior written or oral
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agreements including the ADVISORY AND SERVICING AGREEMENT dated May 20th, 1999.
20. TRANSMISSION: The transmission of this Agreement by fax, wire, telexes,
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or mail shall be deemed a legal and binding transmission.
The parties hereto have executed this Agreement as of the date first above
written.
Thomas Cochran
By: /s/ Tom Cochran
Tom Cochran
J. Thomas Howard, LTD.
By: /s/ James T. Howard
James T. Howard
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EXHIBIT A
Shell Corporation will be structured as follows:
100 Million shares authorized
20 Million shares issued and outstanding
Breakdown as follows:
18 Million shares to Tom Cochran
1 Million shares to be divided amongst 50 shareholders
1 Million shares to JTHL or its assignees; 24 month non
-dilutable 5% position to be maintained
5 Million registered shares additional to be issued for the
purpose of funding and market support
If any additional shares are to be issued for any reason whatsoever during the
first 24 months beginning upon the date of this Service Agreement, JTHL will be
issued additional shares to constitute a 5% (five) ownership of the Client. The
Client agrees to issue an irrevocable Corporate Resolution to attest to the
above clause.
SERVICES RENDERED:
A. Nevada corporation, with presence of business in Nevada
B. Nevada and city of Reno business licenses
C. Good standing certificate from the state of Nevada
D. Custom designed Articles of Incorporation, by-laws and minutes
E. Audited shareholder list
F. 85% controlling block of stock
G. Federal and state tax returns, if required
H. Form 10 registration prepared and filed with the SEC
I. Nevada stock registration
J. Form D field with the SEC
K. 15c2-11 filed with corporate Broker/Dealer
L. 504 Reg D offering memorandum, with legal opinion from counsel attesting
to the condition and validity of the company and offering
M. Offering circular
N. Transfer Agent selected, and initial shares printed
O. Counsel opinion letter to Transfer Agent covering states that the company
can issue stock in
P. CUSIP #
Q. Trading symbol
R. Audited financial statements
S. Financial statements filed with Moody's or Standard & Poors ( secondary
market blue sky in over 35 states)
T. Primary market Blue Sky filings in 7 states
U. Merger or Acquisition agreements
V. All legal work to accomplish this goal
W. Consulting services provided for 60 days at no additional charge to
assist in the understanding of the public arena
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