UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
HEALTHCARE SOFTWARE, INC.
(Name of small business issuer in its charter)
Nevada 7372 88-0429414
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
611 Mulberry Rd., Celebration, FL 34747 877-603-4382
(Address and telephone number of principal executive offices)
Sage International
1135 Terminal Way #209
Reno NV 89502
775-786-5515
(Name, address and telephone number of agent for service)
Approximate date of proposed sale to the public
As soon as possible after the effective date of this Registration Statement
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ X ]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for thee same offering [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment field pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434, check
the following box. [ ].
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CALCULATION OF REGISTRATION FEE
Title of each Number Proposed Proceeds Amount of
Class of securities of shares to maximum offering to registration
To be registered be registered price per unit our Company fee
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<S> <C> <C> <C> <C>
Common Stock 200,000 $ 5.00 (1) $1,000,000 (2) $ 264.00 (3)
$.0001 par value
Common Stock
Offered by sale by 666,666 (4) $ 5.00 (5) (6) $ 880.00 (3)
Selling security
holders
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866,666 $1,000,000 (2) $ 1140.00
<FN>
(1) The offering price is payable in cash upon subscription. The offering will be
managed by us and the shares will be offered and sold by our officers, without any
discounts or commissions.
(2) Proceeds to us are shown before deducting other offering expenses payable by us
for legal and accounting fees and printing costs.
(3) The registration fee is calculated pursuant to Rule 457(a) under the Securities
Act.
(4) Selling security holder stock
(5) Estimated maximum offering price by selling security holders
(6) Healthcare Software, Inc. will not benefit from the sales of these securities
</TABLE>
ITEM 1.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8 (a),
may determine.
The information in this Prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the SEC is
effective. This Prospectus is not an offer to sell these securities and it is
not soliciting an offer to buy these securities in any state where the offer or
sale is not permitted.
Investing in Common Stock is speculative and involves a high degree of risk.
See "Risk Factors" beginning on Page 2.
HEALTHCARE SOFTWARE, INC.
Healthcare Software, Inc., a Nevada corporation, is registering 866,666
shares of its common stock:
* NEW STOCK: We will be selling our 200,000 shares using our best
efforts and no one has agreed to buy any of our shares. There is no
minimum amount of shares we must sell, so no money raised from the sale of
our stock will go into escrow, trust or another similar arrangement. The
offering will remain open until December 31, 2000, unless we decide to
cease selling efforts prior to this date.
* EXISTING STOCK: We will also be registering, concurrently with the
offering, the sale of 666,666 shares of Common Stock previously issued to
initial shareholders of the company. Upon a subsequent resale of these
Securities, any proceeds and profits will be realized by these shareholders
and not by us. The selling shareholders may resell the Common Stock they
have previously received at prices below the initial offering price of the
Securities. They have agreed not to sell any of their shares until we have
closed this offering. These shares are being registered in order to make
them freely tradable but registration does not necessarily mean that any or
all of these shares will, in fact, be sold.
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There is currently no public market for the Common Stock. We expect that
the common stock will be traded on the over-the-counter market maintained by
members of the National Association of Securities Dealers, Inc., (the "OTC
Bulletin Board") after the registration statement is declared effective. There
can be no assurance that an active trading market will develop.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
PROSPECTUS, SUBJECT TO COMPLETION
866,666 SHARES
HEALTHCARE SOFTWARE, INC.
Common Stock
The date of this prospectus is ________________, 2000
<TABLE>
<CAPTION>
ITEM 2. TABLE OF CONTENTS
<S> <C> <C>
Prospectus Summary Page 1
Risk Factors Page 2
- Our company is only recently organized with no operating history which makes an
evaluation of us difficult . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 2
- Because of our lack of funds and past losses, our accountants' audit report indicates
there is substantial doubt about our ability to continue as a going concern. . . . . . . Page 2
- The success of our company is dependent on our management who has limited
experience and will not spend full time working for our company which makes our
future even more uncertain. Page 2
- Our business is capital intensive and we have no significant operating capital so
we are dependent upon this offering to be able to implement our business plan and our
lack of revenues and profits may make our obtaining additional capital more difficult. Page 3
- Failure to attract and retain qualified personnel could harm our business and
operating results. Page 3
- There is no current public market for our shares and there can be no assurance that
one will develop in the future, thus limiting the transferability of our shares. Page 3
- Our certificate of incorporation contains provisions limiting the liability of our
directors to us and our stockholders. Page 3
- Since we do not expect to pay dividends, you cannot expect to receive income
from this investment. Page 3
- Our management's control of our company will limit the ability of other
shareholders to direct the management of our company. Page 3
- Our management may begin selling shares in August, 2001, potentially
depressing the price of the shares in this offering. Page 3
- Current shareholders may decide to immediate sell their shares, potentially
depressing the price of the shares in this offering. Page 4
- Investors will experience immediate and substantial dilution in the book value of
their shares. Page 4
- Since this is a direct participation offering and there is no underwriter, we may not
be able to sell any shares ourselves. Page 4
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- Our common stock may be classified as a "Penny Stock" which could cause
investors in this offering to experience delays and other difficulties in trading the
shares in the Stock Market. Page 4
- Changes in Government regulations may cause us to change the manner in which
we conduct business. Page 4
- Because the price of our stock is likely to be volatile, its market price is likely to
be very unpredictable. Page 5
Use of Proceeds Page 5
Determination of Offering Price Page 5
Dilution Page 6
Selling Shareholders Page 7
Plan of Distribution Page 7
Legal Proceedings Page 9
Directors, Executive Officers, Promoters and Control Persons Page 9
Security Ownership of Certain Beneficial Ownership and Management Page 10
Description of Common Stock Page 10
Interest of Named Experts and Counsel Page 11
Disclosure of Commission Position of Indemnification for Securities Act Liabilities Page 11
Organization Within Last Five Years Page 11
Description of Business Page 11
Management's Discussion and Analysis or Plan of Operation Page 12
Description of Property Page 16
Certain Relationships and Related Transactions Page 16
Market for Common Equity and Related Stockholder Matters Page 16
Executive Compensation Page 17
Financial Statements Exhibit 27
Change In and Disagreements With Accountants on Accounting and Financial Disclosure Page 17
Indemnification of Directors and Officers Page 18
Recent Sales of Unregistered Securities Page 18
Exhibits Page 18
</TABLE>
WHERE YOU CAN GET MORE INFORMATION
At your request, we will provide you, without charge, a copy of any exhibits to
our registration statement incorporated by reference in this prospectus. If you
want more information, write or call us at:
Healthcare Software, Inc.
Investor Relations
301 W. Armour Suite #1000
Kansas City, MO 64111
877-603-4382
Fax 877-603-4383
Our fiscal year ends on December 31. We intend to furnish our shareholders with
annual reports containing audited financial statements and other appropriate
reports. In addition, we are a reporting company and file annual, quarterly and
current reports, proxy statements and other information with the SEC. You may
read and copy any reports, statements or other information we file at the SEC's
public reference room in Washington D.C. Please call the SEC at 1-800-SEC-0330
for further information on the operation of the public reference rooms. You can
also request copies of these documents, upon payment of a duplicating fee, by
writing the Public Reference Section of the SEC at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549. Our SEC filings are also
available to the public on the SEC Internet site at http://www.sec.gov.
------------------
FORWARD-LOOKING STATEMENTS
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Some of the statements in this Prospectus discuss future expectations, contain
projections of results of operations or financial condition or state other
"forward-looking" information. Those statements are subject to known and
unknown risks, uncertainties and other factors that could cause the actual
results to differ materially from those contemplated by the statements. We
based the forward-looking information on various factors and using numerous
assumptions.
Important factors that may cause actual results to differ from those
contemplated by forward-looking statements include, for example:
- the success or failure of our efforts to implement our business strategy
- the effect of changing economic conditions,
- changes in government regulations, tax rates and similar matters,
- other risks which may be described in our future filings with the SEC.
We do not promise to update forward-looking information to reflect actual
results of changes in assumptions or other factors that could affect those
statements.
Until _________________, 2000, all dealers that effect transactions in our
shares, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealer's obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscription.
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ITEM 3. SUMMARY INFORMATION AND RISK FACTORS
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this Prospectus.
This summary is not complete and may not contain all the information that you
should consider before investing in the Common Stock. You should read this
entire Prospectus carefully, including the section entitled "Risk Factors."
OUR COMPANY
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.
We are a developmental stage company with the principal business objective
to provide software for the healthcare industry, specifically hospitals. We
intend to develop software for the hospital industry, targeting the lower tier
40% of hospitals, which, up to this point, could not afford quality software,
our research finds. We plan to deliver our software to the hospitals via the
Internet, and store hospital information on our 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, we believe.
That is, providing software via the Internet. Becoming an "ASP" (Applications
Service Provider) is the untapped frontier and natural progression for software
developers. 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 us as yet, we anticipate
9 to 12 months until the complete 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.
We intend 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 our 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.
THE OFFERING
SECURITIES OFFERED NEW STOCK: Up to a maximum of 200,000 shares of Common
Stock, $.0001 par value
EXISTING STOCK: Up to a maximum of 666,666 shares of
Common Stock, $.0001 par value, by selling security
holders from private placement by the Company.
OFFERING PRICE NEW STOCK: The shares are offered at $5.00 per share for
total gross offering proceeds of $1,000,000.
EXISTING STOCK: Estimated at $5.00 per share for
registration fee purposes only. As these shares may or
may not be sold by current shareholders, at their sole
discretion, according to Federal and State law, the
Company cannot predict or guarantee an offering price at
the time of sale.
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TERMS OF THE OFFERING NEW STOCK: There is no minimum offering.
Accordingly, as shares are sold, we will use the money
raised for our activities. The offering will remain
open until December 31, 2000, or an additional 60 days
in the sole discretion of our management, unless the
maximum proceeds are earlier received or we determine,
in our sole discretion, to cease selling efforts.
EXISTING STOCK: Selling shareholders may, from time
to time, decide to sell their shares. All terms and
conditions of all Federal and State laws, if applicable,
must be complied with.
USE OF PROCEEDS NEW STOCK: We intend to use the net proceeds of
this offering primarily for working capital and
general corporate purposes.
EXISTING STOCK: The Company will receive no proceeds
from the sale of these securities. However, we are
paying the costs of registration of these securities for
the shareholders.
PLAN OF DISTRIBUTION NEW STOCK: This is a best efforts offering, with no
commitment by anyone to purchase any shares. The
offering will be managed by us and the shares will be
offered and sold by our officers, without any discounts
or other commissions.
EXISTING STOCK: To be sold, at shareholders discretion,
with no proceeds going to the Company. See "Plan of
Distribution".
RISK FACTORS
Any investment in our common stock involves a high degree of risk. You should
carefully consider the following information about these risks, together with
the other information contained in this prospectus, before you decide whether to
buy our common stock. If any of the following risks actually occur, our
business, results of operations and financial condition would likely suffer. In
any such case, the market price of our common stock could decline, and you may
lose all or part of the money you paid to buy our common stock.
The risks and uncertainties described below are not the only ones we face.
Additional risks and uncertainties, including those not presently known to us or
that we currently deem immaterial, may also impair our business.
OUR COMPANY IS ONLY RECENTLY ORGANIZED WITH NO OPERATING HISTORY, WHICH MAKES AN
EVALUATION OF US DIFFICULT. Our company was recently organized on June 17,
1999, and is a start-up company. We have no operating history and we do not
have any business prior to our organization. There is nothing at this time on
which to base an assumption that our business plans will prove successful, and
there is no assurance that we will be able to operate profitably. You should
not invest in this offering unless you can afford to lose your entire
investment.
BECAUSE OF OUR LACK OF FUNDS AND PAST LOSSES, OUR ACCOUNTANTS' AUDIT REPORT
INDICATES THERE IS SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING
CONCERN. Our independent certified public accountants have pointed out that we
have incurred losses since our inception and have not yet been successful in
establishing profitable operations, raising substantial doubt about our ability
to continue as a going concern. Therefore, our ability to continue as a going
concern is highly dependent upon obtaining additional financing for our planned
operations. If we are unable to raise additional capital, then you may lose
your entire investment.
THE SUCCESS OF OUR COMPANY IS DEPENDENT ON OUR MANAGEMENT WHO HAS LIMITED
EXPERIENCE AND WILL NOT SPEND FULL TIME WORKING FOR OUR COMPANY WHICH MAKES OUR
FUTURE EVEN MORE UNCERTAIN. As compared to many other public companies, our
company does not presently have a depth of managerial and technical personnel.
Our management has only limited experience with the business proposed to be
engaged in by us. Furthermore, Thomas Cochran, our sole officer and director,
will not be employed full time, at least initially, as he is involved with other
businesses and has other interests which could give rise to conflicts of
interest with respect to the business of and the amount of time devoted to our
company.
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OUR BUSINESS IS CAPITAL INTENSIVE AND WE HAVE NO SIGNIFICANT OPERATING CAPITAL
SO WE ARE DEPENDENT UPON THIS OFFERING TO BE ABLE TO IMPLEMENT OUR BUSINESS PLAN
AND OUR LACK OF REVENUES AND PROFITS MAY MAKE OUR OBTAINING ADDITIONAL CAPITAL
MORE DIFFICULT. We presently have no significant operating capital and we are
totally dependent upon receipt of the proceeds of this offering to provide the
capital necessary to commence our proposed business. Upon completion of the
offering, the amount of capital available to us will still be extremely limited,
especially if less than the total amount of the offering is raised since this is
not an underwritten offering. We have no commitments for additional cash
funding beyond the proceeds expected to be received from this offering. In the
event that the proceeds from this offering are not sufficient given the
capital-intensive nature of our business, we may need to seek additional
financing from commercial lenders or other sources, for which we presently have
no commitments or arrangements.
FAILURE TO ATTRACT AND RETAIN QUALIFIED PERSONNEL COULD HARM OUR BUSINESS AND
OPERATING RESULTS. Our success will depend, in part, upon our ability to
attract and retain qualified employees, technical consultants, management
personnel, and participating hospitals. We are unable to provide any assurance
or guarantee that we will be able to attract, integrate or retain sufficiently
qualified personnel. Our inability to retain additional qualified personnel in
the future could harm our business and operating results.
THERE IS NO CURRENT PUBLIC MARKET FOR OUR SHARES AND THERE CAN BE NO ASSURANCE
THAT ONE WILL DEVELOP IN THE FUTURE, THUS LIMITING THE TRANSFERABILITY OF OUR
SHARES. There is currently no market for any of our shares and no assurances
are given that a public market for such securities will develop after the
closing of this offering or be sustained if developed. While we plan to take
affirmative steps to request or encourage one or more broker-dealers to act as a
market maker for our securities, no such efforts have yet been undertaken and no
assurances are given that any such efforts will prove successful. As such,
investors may not be able to readily dispose of any shares purchased hereby.
OUR CERTIFICATE OF INCORPORATION CONTAINS PROVISIONS LIMITING THE LIABILITY OF
OUR DIRECTORS TO US AND OUR STOCKHOLDERS. Our Certificate of Incorporation
contains provisions, authorized by Nevada law, which eliminate our directors'
liability for breach of fiduciary duty except under limited circumstances.
Theses provisions may limit our ability to have any remedy against a director
who breaches his fiduciary duty.
SINCE WE DO NOT EXPECT TO PAY DIVIDENDS, YOU CANNOT EXPECT TO RECEIVE INCOME
FROM THIS INVESTMENT. We expect to reinvest our income in our growth.
Therefore, an investor cannot expect to receive income from an investment in us.
OUR MANAGEMENT'S CONTROL OF OUR COMPANY WILL LIMIT THE ABILITY OF OTHER
SHAREHOLDERS TO DIRECT THE MANAGEMENT OF OUR COMPANY. After completion of this
offering, assuming all of the shares offered hereby are sold, our management,
inclusive of our Board of Directors will own 6,000,000 shares of our outstanding
common stock. Thus, management will control approximately 87% of our voting
securities, if all shares offered are sold. As a result, our management will
effectively control the affairs of our company, including the election of all of
our Board of Directors, the issuance of additional shares of common stock for a
stock option plan or otherwise, the distribution and timing of dividends, if
any, and all other matters.
OUR MANAGEMENT MAY BEGIN SELLING SHARES IN AUGUST, 2001, POTENTIALLY DEPRESSING
THE PRICE OF THE SHARES IN THIS OFFERING. 91% of our presently outstanding
shares of common stock, aggregating 6,077,666 shares of common stock, are
"restricted securities" as defined under Rule 144 promulgated under the
Securities Act and may only be sold pursuant thereto. Thomas Cochran, our
principal executive officer, owns an aggregate of 6,000,000 restricted shares
that he could begin to sell under Rule 144 beginning on August, 2001. A sale of
shares by Mr. Cochran may have a depressing effect upon the price of our common
stock, offered hereby, in any market that might develop.
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CURRENT SHAREHOLDERS MAY DECIDE TO IMMEDIATE SELL THEIR SHARES, POTENTIALLY
DEPRESSING THE PRICE OF THE SHARES IN THIS OFFERING. 9% of our presently
outstanding shares of common stock, aggregating 666,666 shares of common stock,
are being registered concurrent with this offering. Once this registration
becomes effective, these shares could be sold. This will have a direct and
immediate affect on the dilution of stock.
INVESTORS WILL EXPERIENCE IMMEDIATE AND SUBSTANTIAL DILUTION IN THE BOOK VALUE
OF THEIR SHARES. Immediately after this offering the book value of your shares
will be approximately $.15. This represents dilution of $4.85, or more than
97%, from the purchase price you will pay in the offering assuming all the
shares are sold.
SINCE THIS IS A DIRECT PARTICIPATION OFFERING AND THERE IS NO UNDERWRITER, WE
MAY NOT BE ABLE TO SELL ANY SHARES OURSELVES. No underwriter has been retained
by us to sell these shares. This offering is being conducted as a direct
participation offering, meaning there is no guarantee as to how much money we
will be able to raise through the sale of our shares. Our sole officer will be
selling the shares himself and has limited prior experience in selling
securities. If we fail to sell all the shares we are trying to sell, our
ability to implement our business plan will be materially effected, and you may
lose all or substantially all of your investment.
OUR COMMON STOCK MAY BE CLASSIFIED AS A "PENNY STOCK" WHICH COULD CAUSE
INVESTORS IN THIS OFFERING TO EXPERIENCE DELAYS AND OTHER DIFFICULTIES IN
TRADING THE SHARES IN THE STOCK MARKET. Broker-dealer practices in connection
with transactions in "penny stocks" are regulated by certain rules adopted by
the Securities and Exchange Commission. Penny stocks generally are equity
securities with a price of less than $5.00. The penny stocks generally increase
the amount of disclosure that must be provided by a broker-dealer, making trades
in penny stocks more cumbersome. Because our shares in this offering are priced
at $5.00 per share, it is likely that our shares will be classified as a "penny
stock", and these additional rules and restrictions may decrease the ability of
a shareholder to easily sell his shares in our company, thus potentially
decreasing our shareholders' ability to easily sell shares of our common stock
in the stock market.
CHANGES IN GOVERNMENT REGULATIONS MAY CAUSE US TO CHANGE THE MANNER IN WHICH WE
CONDUCT BUSINESS. We are subject to regulation and licensing of our business by
federal, state and local regulatory agencies. Regulations promulgated by these
agencies are complex and often difficult to comply with. Failure to comply with
regulatory requirements could result in a variety of significant sanctions.
Due to concerns arising in connection with the increasing popularity and use of
the Internet, a number of laws and regulations may be adopted covering issues
such as user privacy, pricing, characteristics, acceptable content, taxation and
quality of products and services. Such legislation could dampen the growth in
use of the Internet generally and decrease the acceptance of the Internet as a
communications and commercial medium. In addition, the growing infrastructure
and many areas with high Internet use have begun to experience interruptions in
phone service. As a result, certain local telephone carriers have petitioned
governmental bodies to both regulate Internet service providers (ISPs) and
online service provides (OSPs) in a manner similar to long distance telephone
carriers and to impose access fees on ISPs and OSPs. If any of these petitions
or the relief sought is granted the costs of communicating on the Internet could
increase substantially and potentially adversely affect the growth in use of the
Internet.
Further, due to the global nature of the Internet, it is possible that the
governments of many states or foreign countries might attempt to regulate our
transmissions or levy sales or other taxes relating to our activities. We
cannot assure you that violations of local laws will not be alleged or charged
by state or foreign governments, that we might not unintentionally violate such
laws or that such laws will not be modified, or new laws enacted, in the future.
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BECAUSE THE PRICE OF OUR STOCK IS LIKELY TO BE VOLATILE, ITS MARKET PRICE IS
LIKELY TO BE VERY UNPREDICTABLE. The market price of our stock, if we are
accepted as a trading company by the OTC Bulletin Board, is likely to be highly
volatile. The market for our stock may be unpredictable because of general
market conditions, as well as factors related to our performance and our ability
to meet market expectations. Such factors as investor perceptions, variations
in our financial condition, announcements regarding our plans and other
developments affecting our future could cause significant fluctuations in the
market price of the stock. In addition, the stock market in general has
recently experienced price and volume fluctuations, which appear to be unrelated
to historical measures such as price-earnings ratio, anticipated revenues,
growth of sales or other investment standards for individual companies. Broad
market fluctuations having nothing to do with our company may also cause the
price of the stock to go down.
ITEM 4. USE OF PROCEEDS
NEW STOCK: We estimate that the net proceeds that we will receive from the sale
of the common stock offered by us will be approximately $1 million. There will
be no fees incurred for expenses related to this offering, as all accounting,
legal, and registration fees have been paid by our sole officer, Thomas Cochran,
in advance.
We currently intend to use the proceeds from this offering for working capital
and general corporate purposes. Our use of proceeds may vary significantly and
will depend on a number of factors described under "Risk Factors". Accordingly,
our management has broad discretion in the allocation of the proceeds.
EXISTING STOCK: The Company will not receive any of the proceeds from the
resale of security holder's stock.
ITEM 5. DETERMINATION OF OFFERING PRICE
The price at which the securities are being offered for sale hereunder has been
arbitrarily determined by management. Prior to this registration of our Common
Stock, there has been no public market for any of our securities and there can
be no assurance that a market will develop. The price of our Common Stock, when
sold by our stockholders will be determined by broker-dealers and market makers
in negotiated transactions, or trades over the open market where we intend to
list our Common Stock. The following are some of the factors which may be
considered by broker-dealers, market makers and investors in order to determine
the price for our securities in the public market:
a) estimates of our business potential;
b) prevailing market conditions in the United States economy and the
market in which we intend to compete; and
c) an evaluation of other companies comparable to us and their ability to
effectively compete with our product.
The offering price and other terms and conditions relative to the shares of
common stock offered hereby have been arbitrarily determined by us and do not
necessarily bear any relationship to assets, earnings, book value or any other
objective criteria of value. In addition, no investment banker, appraiser or
other independent, third party has been consulted concerning the offering price
for the shares or the fairness of the price used for the shares.
ITEM 6. DILUTION
You will suffer substantial dilution in the purchase price of your stock
compared to the net tangible book value per share immediately after the
purchase.
Dilution is the difference between the public offering price of $5.00 per share
for the common stock offered herein and the net tangible book value per share of
the common stock immediately after its purchase. Our net tangible book value
per share is calculated by subtracting our total liabilities from our total
assets less any intangible assets, and then dividing by the number of shares
then outstanding.
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Our net tangible book value prior to the offering, based on the June 30, 2000
audited financial statements, was $NIL, or approximately $ (.0000026) per common
share. Prior to selling any shares in this offering, we have 6,666,666 shares
of common stock outstanding, of which 6,000,000 were purchased by the founding
shareholder for $80,000, or $.013 per share. An additional 666,666 shares were
purchased in a private placement for approximately $.003 per share. We are now
offering up to 200,000 shares at $5.00 per share. If all shares offered herein
are sold, we will have 6,866,666 shares outstanding upon completion of the
offering. Our post offering pro forma net tangible book value, which gives
effect to receipt of the net proceeds from the offering on all shares sold and
payment and issuance of the additional shares of common stock in the offering,
but does not take into consideration any other changes in our net tangible book
value, will be $1,000,007.00 or approximately $.15 per share. This would result
in dilution to investors in this offering of $4.85 per share , or 97% from the
public offering price of $5.00 per share. Net tangible book value per share
would increase to the benefit of our present stockholders from $NIL prior to the
offering to $.15 after the offering, or an increase of $.15 per share
attributable to purchase of the shares by investors in this offering.
DILUTION TABLE
The following table sets forth the estimated net tangible book value ("NTBV")
per share after the offering and the dilution to persons purchasing shares based
upon various levels of sales achieved:
<TABLE>
<CAPTION>
50,000 100,000 150,000 200,000
shares sold shares sold shares sold shares sold
-------------------------------------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Public offering price/share $ 5.00 $ 5.00 $ 5.00 $ 5.00
NTBV/share prior to offering NIL NIL NIL NIL
Increase attributable to new investors $ 0.04 $ 0.065 $ 0.11 $ 0.15
Post offering pro forma NTBV/share $ 0.04 $ 0.065 $ 0.11 $ 0.15
Dilution to new investors $ 4.96 $ 4.935 $ 4.89 $ 4.85
</TABLE>
COMPARATIVE DATA
The following table sets forth with respect to existing shareholders and new
investors, a comparison of the number of shares of common stock acquired from
our company, the percentage ownership of such shares, the total consideration
paid, the percentage of total consideration paid and the average price per
share.
<TABLE>
<CAPTION>
Shares Purchased Total Consideration
------------------ --------------------
Number Percent Amount Percent Avg Price Per Share
--------- ------- -------- -------- --------------------
<S> <C> <C> <C> <C> <C>
Existing
Shareholders 666,666 9.7% $ 2,000 * $ .003
Ownership
Shareholders 6,000,000 87.3% $ 80,000 7.5% $ .013
New
Investors 200,000 2.9% $1,000,000 92.4% $ 5.00
--------- ------- -------- -------- --------------------
6,866,666 99.9% $1,082,000 99.9% $ .15
</TABLE>
* Less than one percent
Please note that it is possible we may not sell any of the shares, in which case
the proceeds to our company will be $0.
ITEM 7. SELLING SHAREHOLDERS
The following table provides certain information with respect to the selling
shareholders' beneficial ownership of our common stock as of June 30, 2000.
Three of the selling shareholders could be considered affiliates of the
registrant, and therefore those shares, totaling 260,667 shares, or 39% of the
selling shareholders, may only be sold under Rule 144. None of the selling
shareholders are or were affiliated with registered broker-dealers. See "Plan of
Distribution." The selling shareholders possess sole voting and investment power
with respect to the securities shown.
Page 6
<PAGE>
<TABLE>
<CAPTION>
Name of Selling Shareholder Number Percent Percent
of Shares of Class of Class
Before After
Offering(1) Offering(1)
----------- -----------
<S> <C> <C> <C>
Russell Anderson 10,667 * *
Earl Atwood 13,333 * *
Ronald Baker 10,667 * *
Gayle Baker 10,667 * *
Richard Cahill 28,333 * *
Mary Bickerton 10,667 * *
EdieDozier 13,333 * *
Seymour Fields 10,000 * *
Shelly Gehle 9,000 * *
John Hiler 11,000 * *
International Broadcasting** 100,000 1.5% *
Investors Holdings** 122,000 1.8% *
Harry Jacobberger 28,333 * *
Richard Jarrett 14,667 * *
K&C Corp 13,333 * *
Pete Kulik 13,333 * *
Kenneth McDermott 13,333 * *
New Source 13,333 * *
Max Raver 12,333 * *
Missouri Investors Trust, LC** 38,667 * *
Linda Modrak 13,333 * *
Brenda Riggs 6,667 * *
Hugo Schielke 12,667 * *
Charles Shook 6,667 * *
Jack Stephens 10,000 * *
Eric Whitener 13,333 * *
David Rossi 12,000 * *
Al Statler 11,667 * *
True Law Firm*** 83,333 * *
-----------
666,666
</TABLE>
* Less than One Percent
** Under the control of J. Thomas Howard, LTD (See Item 19 "Certain
Relationships and Related Transactions")
*** True Law Firm has provided legal counsel to J. Thomas Howard, LTD. J.
Thomas Howard, LTD transferred 22,500 shares from Missouri Investors Trust, LC
in payment. (See Item 19 "Certain Relationships and Related Transactions")
(1) Figures are rounded to the nearest percentage.
Item 8. PLAN OF DISTRIBUTION
Reasons for this Registration
The Company's Board of Directors has determined that it is in the best interest
of Healthcare Software. to register these 666,666 shares at this time, as well
as an additional 200,000 shares to the public at $5.00 per share. Currently
there is no active market for trading. After the completion of this
registration 666,666 shares will be freely tradable. After this registration
6,000,000 shares or approximately 87% of the shares issued and outstanding will
remain restricted and cannot be sold until such time as a subsequent
registration statement if filed by the Company, or with the passage of time, the
owners of the restricted stock can obtain removal of the restriction pursuant to
rules and regulations of the SEC, including Rule 144 or 144(k).
Page 7
<PAGE>
The selling security holders have advised us that, prior to the date of this
prospectus, they have not made any agreement of arrangement with any
underwriters, brokers, or dealers regarding the distribution and resale of the
shares. Further, selling security holders have agreed not to sell their shares
until this offering is completed. If we are notified, however, by a selling
security holder that any material arrangement has been entered into with an
underwriter for the sale of their shares, then, to the extent required under the
Securities Act of 1933 or the rules of the Securities and Exchange Commission, a
supplemental prospectus will be filed to disclose the following information as
the Company believes appropriate:
- The name of the participating underwriter;
- The number of the shares involved
- The price at which such shares are to be sold, the commissions to
be paid or discounts or concessions to be allowed to such
underwriter, and
- Other facts material to the transaction.
The existing shares have not been registered for sale by the selling security
holders under the securities laws of any state as of the date of this
prospectus. Brokers or dealers effecting transactions in these securities
should confirm the registration thereof under the securities laws of the states
in which transactions occur or the existence of any exemption from registration.
We expect that the selling security holders will sell their securities covered
by this prospectus through customary brokerage channels, either through
broker-dealers acting as agents or brokers for the seller, or in the
over-the-counter market, or at private sale or otherwise, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, or at negotiated prices. The selling security holders may effect such
transactions by selling the securities to or through broker-dealers, and such
broker-dealers may receive compensation in the form of concessions or
commissions from the selling security holders and/or the purchasers of the
securities for whom they may act as agent (which compensation may be in excess
of customary commissions). The selling security holders and any broker-dealers
that participate with the selling security holders in the distribution of shares
may be deemed to be underwriters and commissions received by them and any profit
on the resale of securities positioned by them might be deemed to be
underwriting discounts and commissions under the Securities Act. There can be
no assurance that any of the selling security holders will sell any or all of
the common stock offered by them hereunder.
The shares may also be sold in compliance with the Securities and Exchange
Commission's Rule 144. In general, under Rule 144 as currently in effect, any
person (or persons whose shares are aggregated) who has beneficially owned
restricted securities for at least one year is entitled to sell, within any
three-month period, a number of shares that does not exceed the greater of 1% of
the then outstanding shares of the issuer's common stock or the average weekly
trading volume during the four calendar weeks preceding such sale, provided that
certain public information about the issuer as required by Rule 144 is then
available then the seller complies with certain other requirements. Affiliates
may sell unrestricted securities in compliance with Rule 144 subject to the
holding period requirement. A person who is not an affiliate, has not been an
affiliate within three months prior to sale, and has beneficially owned the
restricted securities for at least two years, is entitled to sell such shares
under Rule 144 without regard to any of the limitations described above.
NO ESCROW OF PROCEEDS
There is no escrow of any of the proceeds of this offering. Accordingly, we
will have use of such funds once we accept a subscription and funds have
cleared. Such funds shall be non-refundable to subscribers except as may be
required by applicable law.
LISTING AND TRADING OF THE COMMON STOCK IN THE FUTURE
Immediately after this registration is declared effective, the Company intends
to apply to NASD for listing of the Common stock on NASD's OTC Bulletin Board
and it is anticipated that trading in the common stock should commence shortly
after approval of the listing is received from NASD. No assurance can be given
as to when that approval will be received.
Page 8
<PAGE>
The Company expects that the common stock will initially be traded on the OTC
Bulletin Board after the effectiveness of the registration statement. Shares of
the common stock will be freely transferable, except for shares beneficially
owned by persons who may be deemed to be "affiliates:" of Healthcare Software
under the Securities Act. Persons who may be deemed to be affiliates of the
Company include individuals or entities that control, are controlled by or under
common control with the Company, and include the directors and principal
executive officers of the Company as well as any stockholder that owns 10% or
more of the total stock issued and outstanding. Persons who are affiliates of
the Company will be permitted to sell their shares of common stock only pursuant
to an effective registration statement under the Securities Act or an exemption
from the registration requirements of the Securities Act, which is applicable to
them.
ITEM 9. LEGAL PROCEEDINGS
We are not subject to any pending litigation, legal proceedings, or claims.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The following table sets forth the directors and executive officers of our
company, their ages, term served and all officers and positions with our
company. A director is elected for a period of one year and thereafter serves
until his or her successor is duly elected by the stockholders and qualifies.
Officers and other employees serve at the will of the Board of Directors.
There are no arrangements or understandings regarding the length of time a
director of our company is to serve in such a capacity. Our director holds no
directorships in any other company subject to the reporting requirements of the
Securities Exchange Act of 1934.
Name of Director Age Term Served Positions with Company
-------------------- --- --------------- ------------------------
Thomas Cochran 48 Since inception President, Secretary, Treasurer &
Director
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.
Page 9
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERSHIP AND MANAGEMENT
The following table sets forth certain information as of June 30, 2000, 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.
<TABLE>
<CAPTION>
Name of Beneficial Owner (I) Number Percent
of Shares of Class (2)
<S> <C> <C>
Thomas Cochran (3) 6,000,000 90%
611 Mulberry Rd.
Celebration, FL 34747
All Directors & Officers as a Group 6,000,000
<FN>
(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.
</TABLE>
ITEM 12. DESCRIPTION OF HEALTHCARE SOFTWARE'S COMMON STOCK
Our Certificate of Incorporation authorizes the issuance of 100,000,000 shares
of common stock, with a par value of $.0001 per share. Holders of common stock
are entitled to one vote for each share owned on each matter submitted to a vote
of the shareholders. Currently there are 6,666,666 shares of common stock
issued and outstanding. The Company's Board of Directors has the legal
authority to issue the remaining unissued authorized shares, without shareholder
approval, for any purpose deemed to be in the best interest of Healthcare
Software. Shares could be issued to deter or delay a takeover or other change
of control of Healthcare Software, Inc,
All the shares of the common stock which are now outstanding are fully paid,
validly issued and nonassessable and holders of the common stock have no
preemptive rights to subscribe for or to purchase any additional securities
issued by Healthcare Software. Upon liquidation, dissolution or winding up of
the Company, the holders of common stock are entitled to share ratably in the
distribution of assets after payment of debts and expenses. There are no
conversion, sinking fund or redemption provisions, or similar restrictions with
respect to the common stock.
Holders of the common stock are entitled to receive dividends, when and if
declared by the Board of Directors, out of funds legally available. See
"Dividend Policy".
The transfer agent for Healthcare Software, Inc.'s common stock is Florida
Atlantic Stock Transfer, 7130 Nob Hill Road, Tamarac, Florida 33321.
DIVIDEND POLICY
We have never paid or declared a cash dividend on its common stock and does not
intend to pay cash dividends in the foreseeable future. The payment by
Healthcare Software of dividends, if any, on its common stock in the future is
subject to the discretion of the Board of Directors and will depend on our
earnings, financial condition, capital requirements and other relevant factors.
Page 10
<PAGE>
ITEM 13. INTEREST OF NAMED EXPERTS AND COUNSEL.
N/A
ITEM 14. DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES.
No director of Healthcare Software will have personal liability to Healthcare
Software or any of its stockholders for monetary damages for breach of fiduciary
duty as a director involving any act or omission of any such director since
provisions have been made in the Articles of Incorporation limiting such
liability. The foregoing provisions shall not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to Healthcare
Software or our stockholders, (ii) for acts or omissions not in good faith or,
which involve intentional misconduct or a knowing violation of law, (iii) under
applicable Sections of the Nevada Revised Statutes, (iv) the payment of
dividends in violation of Section 78.300 of the Nevada Revised Statutes or,
(v) for any transaction from which the director derived an improper personal
benefit. The Bylaws provide for indemnification of the directors, officers, and
employees of Healthcare Software in most cases for any liability suffered by
them or arising out of their activities as directors, officers, and employees of
Healthcare Software if they were not engaged in willful misfeasance or
malfeasance in the performance of his or her duties; provided that in the event
of a settlement the indemnification will apply only when the Board of Directors
approves such settlement and reimbursement as being for the best interests of
the Corporation. The Bylaws, therefore, limit the liability of directors to the
maximum extent permitted by Nevada law (Section 78.751). The officers and
directors of Healthcare Software are accountable to Healthcare Software as
fiduciaries, which mean they are required to exercise good faith and fairness in
all dealings affecting Healthcare Software. In the event that a shareholder
believes the officers and/or directors have violated their fiduciary duties to
the Company, the shareholder may, subject to applicable rules of civil
procedure, be able to bring a class action or derivative suit to enforce the
shareholder's rights, including rights under certain federal and state
securities laws and regulations to recover damages from and require an
accounting by management. Shareholders who have suffered losses in connection
with the purchase or sale of their interest in Healthcare Software in connection
with such sale or purchase, including the misapplication by any such officer or
director of the proceeds from the sale of these securities, may be able to
recover such losses from Healthcare Software, Inc.
ITEM 15. ORGANIZATION WITHIN LAST FIVE YEARS.
See Item 19 "Certain Relationships and Related Transactions"
ITEM 16. DESCRIPTION OF BUSINESS
Our principal objective is 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
We plan 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, we plan to offer our products on a lower
monthly fee basis, allowing certain department heads to make the buying
decisions. We believe this will make the usage and sale of our products that
much easier and faster.\
Page 11
<PAGE>
C. DISTRIBUTION METHODS OF THE PRODUCTS OR SERVICES
a) Distribution:
We plan to distribute our software products through the Internet. In
doing so, we plan to have a secure website for hospital employees to access the
software and information. We believe the website will also provide an audience
for other revenue-making projects, such as banners, affiliate sales and related
products.
b) Advertising and Promotion
We plan to market our products directly to hospital department heads
through direct sales personnel. Appropriate sales literature is planned and
being developed, as well as video presentations. We believe our marketing plan
of offering a free month trial of our software via the Internet will allow
hospitals the opportunity to test our product and discover its ease of
operation.
c) Customer Service
We recognize the need for an effective and responsive customer service
base. Using our planned website, We are developing a customer service strategy
to include a help section on the Internet for immediate response to our
customers, as well as chat rooms for users of our products on a 24-hour basis.
ITEM 17. MANAGEMENT'S DISCUSSION AND ANALYSIS OR 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 our initial capital, has concentrated on
researching and developing software products for the hospital industry. We are
formulating our plans for introduction of our planned products on the Internet,
as well as our marketing strategies. We have also identified potential
employees for the development of our products, and continued service.
Page 12
<PAGE>
During the initial phase of researching and developing, we anticipate the
need for additional capital for equipment, personnel, and offices. Our current
office at the home of our President, 611 Mulberry Rd., Celebration, FL 34747,
is being used free of charge and should be adequate for the next several months,
as research and plans are formulated.
On July 24, 1999, we completed an offering of 666,666 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, we have
approximately 6,666,666 shares of our $0.0001 par value common voting stock
issued and outstanding which are held by 29 shareholders of record. We fully
anticipate that the proceeds from the sale will be sufficient to provide for our
capital needs for the next approximately six (6) to twelve (12) months, during
our research stage of development.
In addition, we believe the needs for additional capital going forward will
be derived somewhat from internal revenues and earnings generated from the sale
of our products and services. If we are unable to begin to generate revenues
from our anticipated products, we believe the Company will need to raise
additional funds to meet our cash requirements.
We believe that our initial revenues will be primarily dependent upon the
number of hospitals we can attract, the quality of our software, the
professionalism of our customer service plan, and the profit margins on the
products we offer. Realization of significant sales of our products and services
during the fiscal year ending December 31, 2000 is vital to our plan of
operations. To that end, realization of developing quality hospital software and
selling our products to the target market is paramount to our plan.
(2) No engineering, management or similar report has been prepared or
provided for external use by us in connection with the offer of our securities
to the public.
(3) We believe that the Company's future growth and success will be largely
dependent on our ability to obtain clients to use our products, to attract a
stable sales force, to develop quality software, to market and advertise
effectively and efficiently, and our choice of profitable products. Therefore,
we are working carefully and slowly to develop and research possible approaches
to these business decisions.
We have yet to incur any research and development costs from June 17, 1999, to
present, and we do not expect to incur any significant research amid development
expenses during the fiscal year ending December 31, 2000.
(4) We expect to purchase regular office equipment, i.e., desks,
calculators, computers within the next 12 months. We also intend to
purchase/lease adequate computer equipment for storage and information
dissemination via the Internet for our products and services. We do not have
any facilities or equipment to sell at this time.
(5) We anticipate that we will hire and add 5 full time employees over the
next twelve (12) to sixteen (16) 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, we have devoted a majority
of our time on research and development. During this time, we 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 6,000,000 shares in the Company, constituting a 90% controlling
position.
Page 13
<PAGE>
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, we have formed our organization to pursue our 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. We are a development state enterprise as defined in SFAS #7, and
have yet to generate any revenues. We are devoting substantially all of our
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 $7.11 on hand or in the
bank. Until such time as we set forth and implement our business plan, there
will be 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, we, at
present, foresees the possibility of the need to raise about $1,000,000 in
additional capital to fully enter the revenue stage of our plan. Therefore, we
have begun that process by filing this SB-2 with SEC for approval to raise these
funds.
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, we have financed our cash flow
requirements though issuance of common stock and through contributions from Tom
Cochran. As we expand our activities, we may continue to experience net negative
cash flows from operations, pending receipt of sales revenues. Additionally we
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 our working capital.
Over the next twelve months, we intend to initiate our revenues by
contracting with hospitals in the Untied States for use of our software products
via the Internet. However, we will continue the research and development of
clients/products and in-depth plans. We believe that existing capital and
anticipated funds from this registration will be sufficient to sustain
operations and planned expansion in the next six (6) to twelve (12) months.
However, the need for additional capital after that time may be necessary.
Consequently, we 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 us. In either
case, the financing could have negative impact on the financial conditions of
the Company and its Shareholders.
We anticipate that we will incur operating losses in the next twelve
months. Our lack of operating history make predictions of future operating
results difficult to ascertain. Our 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, we must, among other things, obtain a customer base, implement and
successfully execute our business and marketing strategy, continue to develop
our 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 we will be successful in addressing
such risks, and the failure to do so can have a material adverse effect on our
business prospects, financial condition and results of operations.
Page 14
<PAGE>
Initial financing is only to provide funds to prove the business be
necessary to provide software to the hospital industry via the Internet. We
hope 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, we are unaware of any
governmental approval necessary for the our operations in the marketing
industry. In addition, we are 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, we could be directly affected either adversely or
beneficially.
F. RISKS ASSOCIATED WITH OPERATIONS
Our long-term success is partially predicated on the marketability of our
hospital software products and the strength of our sales force.
Our principal competition consists of entities within the software industry
which are well established. Our ability to compete against these more
established and more financially stable companies is premised upon our ability
to initiate and fulfill our 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 our 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 us in our business plans.
While our 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. We
cannot project with certainty the outcome of our operations, and there are no
assurances that we 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. We cannot guarantee
against the possible eventuality of any potential adverse economic conditions.
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<PAGE>
G. COMPETITION
We will compete with numerous other software companies. Many of these
competitors have substantially greater resources than Healthcare Software. We
have identified a niche in the market as it relates to hospital software,
offering our product and updates over the Internet.
H. DEVELOPING AND CHANGING MARKET
The market conditions for selling software is continually evolving and
changing. We believe the current conditions will continue favorably for this
type of venture. There can be no assurance that our assessment of the situation
is correct, nor that the products we select will be accepted by the clients.
I. EMPLOYEES
As of the current date, we have 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
twelve months of operation. Once these plans are formulated, we will need to
hire full time operational staff as our 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. Our future success also depends on our ability to attract and retain
other qualified personnel, for which competition is intense. The loss of Mr.
Cochran or our inability to attract and retain other qualified employees could
have material adverse affect on the Company.
ITEM 18. DESCRIPTION OF PROPERTY
We currently pay no rent for our 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.
ITEM 19. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Business Consultants. We have relied on J. Thomas Howard, LTD as key business
consultants while in our development stage. J. Thomas Howard, LTD has provided
the assistance in preparing the Company to become a reporting company. For this
assistance, we have issued 260,667 shares of Common Stock at $.001 per share to
companies under control by J. Thomas Howard, LTD.
One of those companies, Missouri Investor's Trust, LC, transferred an additional
83,333 of those shares to True Law firm for legal fees incurred on behalf of J.
Thomas Howard, LTD.
ITEM 20. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Healthcare Software'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."
Since its inception June 17, 1999, we have not paid cash dividends on our
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 therefore, our earnings, financial condition, capital
requirements, and other factors which the Board of Directors deem relevant.
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As of June 30, 2000, there were 30 Common Shareholders of record.
ITEM 21. EXECUTIVE COMPENSATION.
Thomas 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, we cannot
accurately estimate the point when revenues and operating cash flows will be
sufficient enough to implement this compensation plan, nor are we 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, we
plan 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. We may decide, at a later date, and reserve the right
to, initiate these plans as deemed necessary by the Board.
ITEM 22. FINANCIAL STATEMENTS.
See Audited Financial Statements filed with Form 10QSB filed August 10,
2000
ITEM 23. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
NONE
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PART II
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Information on this item is set forth in Prospectus under the heading
"Disclosure of Commission Position on Indemnification for Securities Act
Liabilities"
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Information on this item is set forth in the Prospectus under the heading "Use
of Proceeds"
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
Private Placements.
In July, 1999 we completed an exempt placement of 66,666 shares of common
stock, Pursuant to Rule 504, at a price of $0.003 per share for a total of
$2,000.00. There arc 29 shareholders, all of which hold less than 5% of the
shares.
ITEM 27. EXHIBITS
EXHIBIT 1 - UNDERWRITING AGREEMENT
Not applicable.
EXHIBIT 2. PLAN OF PURCHASE, SALE REORGANIZATION, ARRANGEMENT, LIQUIDATION OR
SUCCESSION.
Not applicable.
EXHIBIT 3. ARTICLES OF INCORPORATION AND BY-LAWS.
Articles of Incorporation filed with Form 10SB12(g) November 12, 1999
EXHIBIT 4. INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES.
(See Exhibit 3)
EXHIBIT 5. OPINION ON LEGALITY.
See Exhibit 23
EXHIBIT 8. OPINION ON TAX MATTERS.
Not applicable.
EXHIBIT 9 VOTING TRUST AGREEMENT AND AMENDMENTS.
Not applicable.
EXHIBIT 10. MATERIAL CONTRACTS.
Advisory and Servicing Contract between Thomas Cochran and J. Thomas Howard, LTD
filed with Form 10SB12(g) November 12, 1999.
EXHIBIT 11. STATEMENT RE COMPUTATION OF PER SHARE EARNINGS.
Not applicable.
EXHIBIT 15. LETTER ON UNAUDITED INTERIM FINANCIAL INFORMATION.
Not applicable.
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EXHIBIT 16. LETTER ON CHANGE IN CERTIFYING ACCOUNTANT.
Not applicable.
EXHIBIT 21. SUBSIDIARIES OF THE SMALL BUSINESS ISSUER.
Not applicable.
EXHIBIT 23. CONSENTS OF EXPERTS AND COUNSEL.
Exhibit 23 Page 1 Consent of Williams & Webster
Exhibit 23 Page 2 Consent of Rick Seay, Attorney at Law
EXHIBIT 24. POWER OF ATTORNEY.
Not applicable.
EXHIBIT 25. STATEMENT OF ELIGIBILITY OF TRUSTEE.
Not applicable.
EXHIBIT 27. FINANCIAL DATA SCHEDULE.
Form 10QSB filed August 10, 2000.
EXHIBIT 99. ADDITIONAL EXHIBITS.
Not applicable.
ITEM 28. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement
(1) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
2) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(3) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(b) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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(c) The undersigned registrant hereby undertakes that for the purpose of
determining any liability under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of
Celebration, State of Florida on August 16, 2000.
Healthcare Software, Inc.
(Registrant)
By /S/
Thomas Cochran, President
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated:
By: /S/
Thomas Cochran, President, Director, Secretary
Date 8/16/00
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