As filed with the Securities and Exchange Commission on November 12, 1999.
Registration No. 333-__________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933,
AS AMENDED
-----------
HEALTHLINK INTERNATIONAL, INC.
--------------------------------------------
(Name of small business issuer in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Nevada 6324 88-0331113
------ ---- ----------
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) I.D. Number)
</TABLE>
929 Eastwind Drive,, Suite 225
Westerville, Ohio 43081
(614) 890-5100
-----------------------------------------------------------
(Address and telephone number of principal executive offices
and principal place of business)
Nicholas G. Venetis, Chief Executive Officer
HealthLink International, Inc.
929 Eastwind Drive, Suite 225
Westerville, Ohio 43081
(614) 890-5100
-------------------------------------------------------
(Name, address and telephone number of agent for service)
Copies of all communications to:
Gary A. Agron, Esq.
Law Office of Gary A. Agron
5445 DTC Parkway, Suite 520
Englewood, CO 80111
(303) 770-7254
(303) 770-7257 (Fax)
Approximate date of commencement of proposed sale to public: As soon as
practicable after the effective date of the registration statement.
<PAGE>
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 the 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 delivery of the Prospectus is expected to be made pursuant to Rule 434,
check the following box: |_|
[EXHIBIT INDEX LOCATED PAGE _____ OF THIS FILING]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=======================================================================================================================
Title of Each Class Amount Proposed Proposed Maximum Amount
of Securities To Be Maximum Price Aggregate of
to be Registered Registered Per Unit Offering Price Registration Fee
=======================================================================================================================
<S> <C> <C> <C> <C>
Units consisting of one share of 3,000,000 $3.00 $ 9,000,000 $ 2,655
common stock, $.001 par value, Units
and one common stock purchase
warrant...............................
Common stock purchase warrants 3,000,000 $-0- $ -0- $ -0-
included in the units (1)............. Warrants
Common stock, $.001 par value,
underlying common stock purchase 3,000,000 $5.00 $15,000,000 $ 4,425
warrants (1).......................... Shares
Total $24,000,000 $ 7,080
=======================================================================================================================
</TABLE>
(1) Pursuant to Rule 416 of the Securities Act of 1933, as amended, the number
of shares issuable upon exercise of the Warrants is subject to adjustment
in accordance with the anti-dilution provisions of such Warrants.
The Registrant hereby amends the 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.
ii
<PAGE>
Subject to completion dated November 12, 1999
3,000,000 Units
HEALTHLINK INTERNATIONAL, INC.
[LOGO]
We offer benefit savings plans which allow our plan members to pay reduced
prices on health care products and services, including the services of over
500,000 physicians, hospitals, dentists, chiropractors, hearing and eye care
specialists, nurses and counselors. Our members access these healthcare products
and services by presenting our discount health cards at the point of purchase.
We are offering a minimum of 1,000,000 units and a maximum of 3,000,000
units of our securities, on a best efforts basis without the assistance of an
underwriter. Each unit consists of one share of common stock and one redeemable
common stock purchase warrant, for $3.00 per unit. The common stock and warrants
will trade separately and not as units.
Upon sale of the minimum 1,000,000 units, we will apply to list our common
stock and warrants on the Electronic Bulletin Board under the symbols "HLNK" and
"HLNKW." Until 1,000,000 units are sold, all funds received will be placed in a
non-interest bearing escrow account. If 1,000,000 units are not sold within 90
days from the date of this prospectus, unless we extend the offering for up to
60 days, all funds will be returned to the investors without interest.
See "Risk Factors" beginning on page 7 to read about factors you should
consider before buying our units.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
Per Unit Minimum Maximum
-------- ------- -------
Public offering price . . . . . . $3.00 $3,000,000 $ 9,000,000
Underwriting discounts
and commissions . . . . . . . . $0.30 $ 300,000 $ 900,000
Proceeds to HealthLink
International, Inc. . . . . . .$2.70 $2,700,000 $ 8,100,000
The date of this prospectus is ______________ , 1999.
<PAGE>
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
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and we are not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
You may rely only on the information contained in this prospectus. We have
not authorized anyone to provide information different from that contained in
this prospectus. Neither the delivery of this prospectus nor the sale of units
means that information contained in this prospectus is correct after the date of
this prospectus. This prospectus is not an offer to sell or solicitation of an
offer to buy the units if the offer or solicitation would be unlawful.
TABLE OF CONTENTS
Page
----
Prospectus Summary...................................................... 3
Summary Financial Data.................................................. 6
Risk Factors............................................................ 7
Use of Proceeds......................................................... 12
Dividend Policy......................................................... 12
Dilution................................................................ 13
Capitalization.......................................................... 14
Selected Financial Data................................................. 15
Our Plan of Operation................................................... 16
Our Business............................................................ 17
Our Management.......................................................... 24
Our Principal Stockholders.............................................. 27
Related Party and Other Material Transactions........................... 27
Description of Our Securities........................................... 28
Plan of Distribution.................................................... 30
Legal Matters........................................................... 31
Experts................................................................. 31
Additional Information.................................................. 31
Financial Statements.................................................... F-1
2
<PAGE>
PROSPECTUS SUMMARY
The following summary includes all material items relating to the offering
and should be read with the more detailed information and financial statements
appearing elsewhere in this prospectus.
Our Business
We offer benefit savings plans which allow our plan members to pay reduced
prices on healthcare products and services, including the services of
physicians, hospitals and ancillary healthcare providers, such as dentists,
chiropractors, hearing and eye care specialists, nurses and counselors. Our
members access these healthcare products and services by presenting our discount
health cards at the point of purchase.
We currently have over 450,000 physicians, 6,500 hospitals and 55,000
ancillary healthcare service providers located throughout the United States
available to care for our members. The retail price of our benefit savings plan
is $99 per year. We also offer wholesale prices to many affinity groups such as
large corporations, small business and trade associations and charitable
organizations. These affinity groups may market our discount health cards under
their own names or simply use our own branded discount cards.
We market our benefit savings plans through:
o a network marketing organization affiliated with us;
o the Internet; and
o our in-house marketing staff.
Our Market Opportunity
We believe that our emphasis on discount health services, which are offered
under our benefit savings plans, address two significant concerns in the
healthcare industry: cost containment and the rising number of people who are
uninsured or underinsured. In recent years, the cost of healthcare products and
services has increased at a greater rate than that of inflation. These
increasing costs have led to limitations on reimbursement from insurance
companies, HMOs and government sources and have generated demand for products
and services designed to control health care costs. Many employers have
responded to the increased cost of providing insurance to their employees by
reducing or eliminating available insurance coverage and/or by requiring
employees to contribute heavily to premiums, especially for family members. As a
result, the U.S. Census Bureau reported that in 1997 approximately 43 million
Americans, or approximately 16% of the population, had no health insurance, and
most Americans lacked insurance coverage for one or more "ancillary" healthcare
services, such as dental, chiropractic, hearing care, eye care and
pharmaceutical services. It is not just members of the middle class who are
uninsured or underinsured. The U.S. Census Bureau report also indicated that 4.8
million Americans with household incomes of $75,000 or more and 5.7 million
Americans with incomes between $50,000 to $75,000 were uninsured.
As a result of the baby boom generation, people over age 50 represent the
fastest growing segment of the United States population. As the population ages,
more people will need both primary and ancillary healthcare products and
services.
3
<PAGE>
We believe that our medical discount cards provide a low-cost,
non-insurance alternative to:
o those seeking to reduce healthcare costs not covered by insurance;
o those desiring to fill in the coverage gaps in their current policies;
o those who are unable to obtain healthcare insurance due to their
medical history, age or occupation; and
o those that may be underinsured because of restrictions or provisions
within their managed care plans.
For an annual fee, our members are able to obtain discounts of
approximately 25% or more off the retail, or usual and customary, charges of
participating healthcare providers. We accept all applicants regardless of their
age, health or prior medical condition, and our cards can be used to cover the
member's entire immediate family.
Our Strategy
Our strategy is to:
o expand our marketing capabilities;
o increase the number and content of our benefits savings plans;
o increase sales of our benefit savings plan programs; and
o start up or acquire other companies engaged in healthcare or related
industries.
To date, our operations have been limited to the development and initial
marketing of our benefit savings plans. Revenue has also been limited and has
been generated primarily by sales of discount medical services to members of an
affiliated network marketing company.
Our History
We were incorporated in Nevada in November 1994 as Commercial Building
Systems, Inc. but were inactive until September 1998, when we commenced our
current operations. We changed our name to HealthLink International, Inc. in
March 1999. Our corporate offices are located at 929 Eastwind Drive, Suite 225,
Westerville, Ohio 43081, telephone number (614) 890-5100. Our Web site is
located at www.healthlinkintl.com. Information contained in our Web site should
not be considered a part of this prospectus.
The Offering
Securities offered . . . . . . 3,000,000 units, each unit consisting of one
share of common stock and one redeemable
common stock purchase warrant. The common
stock and warrants will trade separately and
not as units. Each warrant is exercisable to
purchase one share of common stock at $5.00
per share until December 31, 2002. We may
call the warrants for redemption on 30 days'
notice if our common stock price exceeds
$6.00 per share for ten consecutive trading
days.
4
<PAGE>
Securities outstanding
prior to the offering . . . . 11,839,827 shares of common stock
Securities to be outstanding
after the offering . . . . . 14,839,827 shares of common stock and
3,000,000 common stock purchase warrants
Use of proceeds . . . . . . . For marketing and advertising expenses; to
fund an increase in our product and service
providers; for general and administrative
and other operating expenses; to fund our
commitment to Longport, Inc. and for working
capital.
Proposed Bulletin Board
symbols . . . . . . . . . . . HLNK for our common stock and HLNKW for our
warrants
Risk factors . . . . . . . . . Investment in our securities involves a high
degree of risk and could result in a loss of
your entire investment.
5
<PAGE>
SUMMARY FINANCIAL DATA
The following tables set forth financial information derived from our
audited financial statements for the year ended December 31, 1998 and other
financial information derived from our unaudited financial statements for the
six months ended June 30, 1999 and 1998. We commenced our current operations in
September 1998.
<TABLE>
<CAPTION>
Six Months Ended June 30 Year Ended December 31
1999 1998 1998
---------- --------- ------------------
<S> <C> <C> <C>
Statement of Operations Data
- ----------------------------
Revenue . . . . . . . . . . . $ 108,069 $ ----- $8,242
Cost of sales . . . . . . . . $ 90,695 $ ----- $6,917
Operating expenses . . . . . . $ 122,520 $ ----- $1,250
Research and development . . . $ 60,000 $ ----- $ --
Net income (loss). . . . . . . $(165,146) $ ----- $ 75
Weighted average
number of shares
outstanding . . . . . . . . . 11,465,689 11,465,689 11,465,689
Net income (loss) per share. . $ (.01) $ ----- $ --
Actual As Adjusted(1)
------ --------------
Balance Sheet Data at June 30, 1999:
- ------------------------------------
Working capital . . . . . . . . . . . . . . $ (12,738) $7,787,262
Total assets . . . . . . . . . . . . . . . $1,553,125 $9,353,125
Total liabilities . . . . . . . . . . . . . $ 12,738 $ 12,738
Stockholders' equity . . . . . . . . . . . $1,540,387 $9,340,387
</TABLE>
(1) As adjusted to reflect the sale of 3,000,000 units offered by this
prospectus at $3.00 per unit and the application of the net proceeds.
6
<PAGE>
RISK FACTORS
This offering involves a high degree of risk. You should carefully consider
the risks and uncertainties described below and the other information in this
prospectus before deciding whether to invest in our securities. If any of these
risks occur, our business, results of operations and financial condition could
be harmed. This could cause the trading price of our securities to decline, and
you might lose part or all of your investment.
Our operating history is extremely limited; we may have future losses and may
need more capital.
We commenced our current business operations in February 1998, have
incurred losses since that date and have not generated significant revenue.
Accordingly, we have no operating history upon which an investor can evaluate
us, and our prospects are subject to risks and uncertainties encountered by
early- stage companies that operate in a constantly evolving market, such as the
healthcare market.
Our limited operating history and the uncertainty of the evolving
healthcare market make any prediction of our future results of operations
difficult or impossible. We expect to increase considerably our operating
expenses in the future, particularly by expanding our marketing capabilities. As
a result, we may incur losses and may need to raise additional capital. We
cannot assure that we will be able to raise additional capital, and we do not
know what the terms of any capital raising would be. Any future sale of our
equity securities would dilute the ownership and control of our stockholders and
could be at prices substantially below the offering price of our units.
We may not be able to sell enough discount health services cards to earn a
profit.
Our success depends upon acceptance of our discount health services cards
by consumers, employers, HMOs, and medical benefits associations. To date, we
have sold only a minimal number of cards, and we cannot assure that we will be
able to sell enough cards in the future to earn a profit.
Our benefits savings programs have been marketed by an affiliated company that
can terminate its relationship with us at any time.
We currently have limited marketing capabilities and will have to
significantly expand our sales and marketing resources in order to increase
revenue. To date, our revenue has been generated solely through Purchase Plus
Buyers Group, Inc., an affiliated network marketing company, which offers our
benefits savings programs to Purchase Plus members. Our agreement with Purchase
Plus may be cancelled by either party on 30 days' notice.
We depend upon agreements for discounted products and services which can be
terminated upon short notice.
Our success depends upon our ability to obtain and maintain service
agreements with healthcare provider networks under discount pricing terms that
make our benefit savings plans attractive. To date, we have entered into
non-exclusive agreements with the representatives of two such provider networks,
International MedCare, Inc. and National Administrative Company, Inc. The
International MedCare, Inc. agreement may be terminated at the election of
either party on 45 days written notice, and the National Administrative Company,
Inc. agreement may be terminated on 120 days written notice before the end of
each contract year. Termination of either provider agreement could harm our
business.
7
<PAGE>
We may be liable for medical malpractice claims.
Physicians and other medical entities have become increasingly vulnerable
to lawsuits alleging medical malpractice. While we do not practice medicine or
control any provider's practice of medicine, we may become a party to
malpractice litigation anyway. We may also be exposed to claims for personal
injuries as a result of the incorrect preparation or packaging of prescriptions.
We take precautions to avoid these claims, such as by seeking indemnification
from providers, but we cannot assure that our precautions will prove adequate.
Because we do not render medical services, we cannot obtain malpractice
insurance. We do not maintain errors and omissions insurance, but we maintain
general liability insurance which provides coverage for property damage,
business liability and medical payments.
We must comply with government regulations which are costly and may limit our
operations.
The delivery of our discount health care products and services is subject
to federal, state and local regulation, including:
o the prohibition of business corporations from providing medical care;
o the fraud and abuse provisions of the Medicare and Medicaid statutes;
o state laws that prohibit referral fees and fee splitting; and
o regulations applicable to insurance companies and organizations that
provide healthcare services.
In addition, statutes and regulations applicable to other healthcare
organizations with which we may contract, such as patient freedom of choice
rights and anti-discrimination rights, may force other organizations to withdraw
as our providers. Compliance with these statutes and regulations are costly and
may limit our operations.
We compete with other cost containment organizations for employee benefit
expenditures.
We compete with other medical cost-containment organizations, such as
preferred provider organizations, HMOs and insurance companies, for a portion of
employee medical benefit expenditures made by employers. Most of these
competitors have had longer operating histories and have greater financial,
marketing and other resources than we.
Our management is inexperienced and may not be able to manage our growth.
Our management team has worked together for only a short time and none of
our executive officers has extensive experience managing a business enterprise
similar to ours. Any growth we experience will place a significant strain on our
management and financial resources. Any inability of our management to manage
growth effectively could increase our operating expenses and impair our
marketing efforts.
8
<PAGE>
If government regulations regarding network marketing companies are changed,
interpreted or enforced in a manner adverse to our network marketer, our revenue
could be reduced.
A significant portion of our revenue is generated through sales of discount
medical services to members of Purchase Plus, a network marketing company
affiliated with us. Network marketing companies are subject to extensive
governmental regulation, including federal and state regulation regarding
network marketing plans and the offer and sale of business franchises, business
opportunities and securities. Any change in legislation or regulations or the
noncompliance with these regulations by our network marketer could reduce its
membership and thereby reduce our revenue.
Failure of third parties to achieve Year 2000 compliance could adversely affect
our business.
Many currently installed computer systems and software products are coded
to accept only two-digit entries to represent years in the date code field.
Computer systems and products that do not accept four-digit entries will need to
be upgraded or replaced to accept four-digit entries to distinguish years
beginning with 2000 from prior years. We believe our computer systems and those
of our healthcare providers are Year 2000 compliant. Any failure of the systems
of third parties with whom we deal to achieve Year 2000 compliance could harm
our business.
Future sales of our common stock or shares issuable upon exercise of stock
options could adversely affect our stock price and our ability to raise funds in
new stock offerings.
We currently have 11,839,827 shares of restricted common stock outstanding,
of which 11,474,310 shares may be sold between March and July 2000, and the
balance of 365,517 shares may be sold commencing November 2000. Sale of
substantial amounts of our common stock, or the perception that sales could
occur, could reduce the market price of the common stock.
Because our offering is not underwritten by a brokerage firm and is being
conducted on a best efforts basis, your funds may be held in a non-interest
bearing escrow account for up to five months.
We are seeking to sell the units without the assistance of an underwriter
that would generally be retained to purchase the securities directly from us for
resale to the underwriter's clients and other brokerage firms. However, we are
offering the units ourselves, which makes it less likely that the minimum number
of units will be sold. Until we sell the minimum 1,000,000 units, all investor
funds will remain in a non-interest bearing escrow account during the selling
period, which could be up to five months from the date of this prospectus. At
the end of the selling period, if we have not sold 1,000,000 units, the funds
will be returned to investors without interest, and investors will not have had
the use of their funds during the selling period.
We may redeem the warrants.
We may redeem the warrants offered as a part of the units at any time upon
30 days' written notice to the warrantholders at $.01 per warrant if our common
stock trades at $6.00 or more per share for ten consecutive trading days. In
this event, the warrants will be exercisable until the close of business on the
date fixed for redemption in the notice. Any warrants not exercised by this time
will cease to be exercisable, and the holder will be entitled only to the
redemption price.
9
<PAGE>
Since there is no current market for our common stock, and since we do not have
an underwriter for our offering, purchasers may be unable to sell our common
stock in the future.
There is presently no public market for the common stock and warrants and
no assurance that an active market will develop or be maintained. Accordingly,
there can be no assurance that purchasers will be able to sell their securities
in the future. Since we have no underwriter in the offering, we may be unable to
attract brokerage firms willing to make a market in our securities, which will
further reduce the liquidity of the securities.
We have not registered our warrants in a number of jurisdictions, and therefore,
holders may not be able to exercise them.
The warrants are not convertible or exercisable unless, at the time of
exercise, we have a current prospectus covering the shares of common stock
issuable upon exercise of the warrants and these shares have been registered,
qualified or deemed to be exempt under the securities laws of the
warrantholders' state of residence. There can be no assurance that we will have
or maintain a current prospectus or that the securities will be qualified or
registered under any state laws.
We cannot assure that our securities will trade on the Electronic Bulletin
Board. Even if our securities trade on the Electronic Bulletin Board, it may be
difficult to sell our securities.
We will be unable to apply for listing of our securities on the Electronic
Bulletin Board until we sell the minimum 1,000,000 units and until the proceeds
from the sale have been deposited in escrow. Accordingly, we cannot assure that
our securities will be accepted for listing on the Electronic Bulletin Board. If
the securities are not accepted for listing, then no public market will develop
for resale of the securities, and investors would be unable to sell the
securities offered by this prospectus. If the securities are listed for trading
on the Electronic Bulletin Board, investors may find it more difficult to
dispose of or to obtain accurate quotations for the market value of our
securities compared to securities which trade on the Nasdaq system or on
national stock exchanges.
Forward-looking statements may be unreliable.
Many statements made or incorporated by reference in this prospectus are
"forward-looking statements", as that term is defined in the Private Securities
Litigation Reform Act of 1995. These forward-looking statements include
statements about:
o our ability to market our benefit savings plans;
o our ability to obtain discounted products and services from third
party providers;
o the anticipated growth in the number of older Americans and their
healthcare needs;
o competitiveness of the healthcare cost containment industry;
o our strategy to expand revenue and generate earnings;
o other statements that are not historical facts.
10
<PAGE>
When used in this prospectus, the words "anticipate", "believe", "expect",
"estimate", "intend" and similar expressions are generally intended to identify
forward-looking statements. Because these forward-looking statements involve
risks and uncertainties, there are important factors that could cause our actual
results to differ materially from those expressed or implied by these forward
forward-looking statements, including:
o changes in the healthcare industry;
o steps taken by current and future competitors;
o the extent to which we are able to develop and expand markets for our
benefit savings plans;
o the time and expense involved in our development activities; o the
level of demand for, and market acceptance of, our benefit savings
plans;
o changes in our business strategy;
o other factors discussed in the "Risk Factors" section and elsewhere in
this prospectus.
11
<PAGE>
USE OF PROCEEDS
After payment of underwriting commissions and other expenses of the
offering, the net proceeds of the offering are estimated to be $2.4 million if
the minimum number of units is sold and $7.8 million if the maximum number of
units is sold. We expect to use the net proceeds over the next 12 months
approximately as follows:
Assuming minimum proceeds of $2.4 million:
o $0.7 million for marketing and advertising expenses;
o $0.4 million to increase our product and service providers;
o $0.25 million for general, administrative and other operating
expenses;
o $0.54 million to fund our commitment to Longport, Inc. through
December 2000; and
o $0.51 million for working capital.
Assuming maximum proceeds of $7.8 million:
o $2.5 million for marketing and advertising expenses;
o $3.0 million to increase our product and service providers;
o $0.75 million for general, administrative and other operating
expenses;
o $0.54 million to fund our commitment to Longport, Inc. through
December 2000; and
o $1.01 million for working capital.
There may be changes in our proposed use of proceeds due to changes in our
business.
Proceeds not immediately needed will be invested in bank certificates of
deposit, treasury bills, insured bank deposits or similar investments.
DIVIDEND POLICY
We have never paid dividends on our common stock and do not intend to pay
dividends in the foreseeable future. Instead, we will retain any earnings to
finance the expansion of our business and for general corporate purposes.
12
<PAGE>
DILUTION
At June 30, 1999, the net tangible book value of our outstanding shares of
common stock was approximately $1,540,387, or $.13 per share. "Net tangible book
value" per share represents the total amount of our tangible assets, less the
total amount of our liabilities, divided by the number of shares of common stock
outstanding. Without taking into account any changes in net tangible book value
after June 30, 1999, other than to give effect to the sale of all 3,000,000
shares of common stock offered hereby at a public offering price of $3.00 per
share, less underwriting discounts and commissions and estimated costs of the
offering, our net tangible book value at June 30, 1999 would have been
approximately $9.3 million, or $.65 per share. This assumes that the warrants
included in the units have no value. This per share value represents an
immediate increase in net tangible book value of $.52 per share of common stock
to our existing stockholders and an immediate dilution of $2.35 per share to new
investors. "Dilution" per share represents the difference between the price to
be paid by the new stockholders and the net tangible book value per share of
common stock immediately after this offering.
The following table illustrates this per share dilution:
Public offering price per share . . . . . . . . . $3.00
Net tangible book value per share
before the offering . . . . . . . . . . . . $.13
Increase in net tangible book value
per share attributable to new investors
purchasing in the offering . . . . . . . . $.52
Net tangible book value per share
after the offering . . . . . . . . . . . . . . . $ .65
-----
Dilution per share to new investors. . . . . . . . $2.35
=====
The following table sets forth the maximum number of shares of common stock
that may be purchased, the total consideration to be paid and the average price
per share paid by our existing stockholders as of June 30, 1999 and new
investors purchasing shares of common stock offered hereby:
<TABLE>
<CAPTION>
Shares Purchased Total Consideration Average
---------------- ------------------- Price
Number Percentage Amount Percentage Per Share
------ ---------- ------ ---------- ---------
<S> <C> <C> <C> <C> <C>
New investors .............. 3,000,000 20.7% $9,000,000 94.7% $ 3.00
Existing stockholders ...... 11,465,689 79.3% $ 503,460 5.3% $ .04
---------- ----- ---------- -----
TOTALS ..................... 14,465,689 100.0% $9,503,460 100.0%
========== ===== ========== =====
</TABLE>
13
<PAGE>
CAPITALIZATION
The following table sets forth our historical and as adjusted
capitalization as of June 30, 1999, after deducting underwriting discounts and
commissions and estimated offering expenses. As adjusted capitalization reflects
the sale of the maximum 3,000,000 units offered hereby at an offering price of
$3.00 per share and the application of the net proceeds.
<TABLE>
<CAPTION>
June 30, 1999 June 30, 1999
Actual As Adjusted
------------- -------------
<S> <C> <C>
Stockholders' equity:
Preferred stock, 1,000,000 no par value shares
authorized, no shares issued ............................ $ -- $ --
Common stock, 100,000,000 $.001 par
value shares authorized, 11,465,689
shares outstanding, 14,465,689 shares
outstanding, as adjusted ................................ 11,466 14,466
Additional paid-in capital ................................ 491,994 8,288,994
Retained earnings (deficit) ............................... (166,198) (166,198)
Accumulated other comprehensive income .................... 1,203,125 1,203,125
----------- -----------
Total stockholders' equity ....................... 1,540,387 9,340,387
----------- -----------
Total capitalization ............................. $ 1,540,387 $ 9,340,387
=========== ===========
</TABLE>
14
<PAGE>
SELECTED FINANCIAL DATA
The following tables set forth financial information derived from our
audited financial statements for the year ended December 31, 1998 and other
financial information derived from our unaudited financial statements for the
six months ended June 30, 1999 and 1998.
<TABLE>
<CAPTION>
Six Months Ended June 30 Year Ended December 31
1999 1998 1998
------------ ------------ ----------------------
Statement of Operations Data
- ----------------------------
<S> <C> <C> <C>
Revenue .................................... $ 108,069 $ -- $ 8,242
Cost of sales .............................. $ 90,695 $ -- $ 6,917
Operating expenses ......................... $ 122,520 $ -- $ 1,250
Research and development ................... $ 60,000 $ -- $ --
Net income (loss) .......................... $ (165,146) $ -- $ 75
Weighted average
number of shares
outstanding ............................... 11,465,689 11,465,689 11,465,689
Net income (loss) per share ................ $ (.01) $ -- $ --
</TABLE>
Actual As Adjusted(1)
------ --------------
Balance Sheet Data at June 30, 1999:
- ------------------------------------
Working capital .................................. $ (12,738) $ 7,787,262
Total assets ..................................... $ 1,553,125 $ 9,353,125
Total liabilities ................................ $ 12,738 $ 12,738
Stockholders' equity ............................. $ 1,540,387 $ 9,340,387
(1) As adjusted to reflect the sale of 3,000,000 units offered hereby at $3.00
per unit and the application of the net proceeds.
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OUR PLAN OF OPERATION
The following discussion of our plan of operation should be read in
conjunction with our financial statements, the notes related thereto, and the
other financial data included elsewhere in this prospectus. The discussion
contains forward-looking statements that reflect our plans, estimates and
beliefs. Our actual results could differ materially from those discussed in the
forward-looking statements. Factors that could cause or contribute to these
differences include, but are not limited to, those discussed below and elsewhere
in this prospectus, particularly in "Risk Factors."
We are a start-up company, having commenced operations in September 1998.
To date, our activities have been limited to drafting our business plan,
organizing our company, developing our initial relationships with discount
healthcare providers, hiring personnel, opening our offices and developing our
initial marketing plans.
We lost $165,146 for the six months ended June 30, 1999, and we expect to
incur additional losses for the remainder of 1999 and into 2000 as a result of
additional costs we expect to incur associated with marketing, hiring of
personnel and instituting our business plan.
If we raise the minimum net proceeds of $2.4 million, we intend to increase
our product and service providers, emphasizing discount healthcare providers and
spending on marketing and advertising, with emphasis upon our Internet
operations. We will also continue to develop an in-house marketing staff and
maintain our commitment to Longport, Inc.
If we raise additional net proceeds in excess of $2.4 million, we will
concentrate most of our additional spending on further increasing our product
and service providers and on further expanding our marketing activities. In this
event, we will begin to add non-healthcare providers, including those that offer
services to small businesses, such as tax preparers, equipment lessors and
business insurers. We will also seek to acquire other companies engaged in
healthcare and related industries and ramp up our marketing activities to
support our additional activities.
We currently expect that our available cash resources combined with the net
proceeds from the offering will be sufficient to meet our anticipated capital
rquirements for at least the 12 months following our receipt of the minimum net
proceeds of this offering of $2.4 million.
We do not expect to incur any significant costs to address the impact of
the so-called Year 2000 problem. The Year 2000 problem concerns the inability of
information systems, primarily computer software programs, to properly recognize
and process date-sensitive information as the Year 2000 approaches. We believe
that our present systems and those of our healthcare providers are Year 2000
compliant.
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<PAGE>
OUR BUSINESS
Our Current Operations
Our primary savings product is our HealthLink discount health card, which
allows holders to obtain discounts of approximately 25% or more on purchases of
healthcare products and services through our networks of healthcare providers.
Our discount card provides our members with reduced rates on physician and
hospital services, on ancillary medical services and on a 24-hour information
line staffed by nurses. Our health services networks comprise an aggregate of
approximately 450,000 physicians, 6,500 hospitals and 55,000 other medical
providers who offer ancillary health services and products throughout the United
States, such as:
o dental care;
o chiropractic services;
o hearing care;
o eye care; and
o pharmacy plans.
Our physicians and hospital providers offer a full range of primary medical
services, as well as:
o plastic and cosmetic surgery;
o infertility services;
o psychiatric services; and
o services related to chemical dependency.
Substantially all of our discounted medical products and services are
provided under contracts we have with two network providers: International
MedCare, Inc. and National Administrative Company, Inc.
Our contract with IMC expires October 2000 and is cancellable by either
party on 45 days' notice. IMC provides us with networks of physicians, hospitals
and other healthcare providers that offer healthcare services under our discount
card.
Our contract with NAC expires October 2002 and may be cancelled by either
party on 120 days' notice prior to year end. NAC provides us with networks of
ancillary healthcare providers, including dentists, chiropractors, hearing care
specialists and eye care specialists, as well as other ancillary products,
including pharmacy services, a 24-hour nurse information line and a legal
benefits plan.
To date, all of our revenue has been generated through sales of our
discount medical services to members of Purchase Plus Buyer's Group, Inc.
Purchase Plus is a network marketing company owned by Everett Eugene Armold, who
is married to Cleone W. Armold, a principal stockholder and director of our
company. We anticipate that revenue generated by sales to members of Purchase
Plus will represent a smaller percentage of our total revenue in the future as
we expand our marketing efforts.
We believe that our emphasis on discount health services addresses two
significant concerns in the healthcare industry: cost containment and the rising
number of people who are uninsured or underinsured. We believe that our discount
cards provide a low-cost, non-insurance alternative to individuals who are
seeking to reduce their out-of-pocket healthcare costs not covered by insurance
17
<PAGE>
or who are unable to obtain healthcare insurance due to their medical history,
age or occupation. For an annual fee of $99, our members obtain discounts of
approximately 25% or more off the retail, or usual and customary, charges of
participating healthcare providers. Acceptance in our program is unrestricted,
and our cards can be used to cover the member's entire immediate family.
Our Strategy
Our strategy is to:
o further develop and expand our marketing capabilities by:
o completing the development of our bilingual Internet Web site;
o developing programs to offer our benefit savings plans directly
to affinity groups, such as large corporations, small business
and trade associations and charitable organizations; and
o expanding our in-house marketing staff.
o develop benefit savings plans for small businesses which would include
access to discounts on tax preparation, equipment leasing and business
insurance;
o increase our benefit savings plan sales by adding non-medical related
discounted products and services, such as accidental death coverage
and ambulance services; and
o start up or acquire other companies engaged in healthcare or related
industries.
We will seek to enter into agreements with other networks of providers that
offer primary, ancillary and other discounted services and products not
currently offered by us. We intend to monitor the needs of members for
additional services that might be available. We also intend to monitor the
market for new medical benefits products that might be included with our
healthcare discount cards.
Healthcare Overview
In recent years the cost of healthcare products and services has increased
at a greater rate than inflation. These increasing costs have led to limitations
on reimbursement from insurance companies, HMOs and government sources and have
generated demand for products and services designed to control healthcare costs.
Many employers have responded to the increased cost of providing health
insurance to their employees by reducing or eliminating available insurance
coverage and/or by requiring employees to contribute heavily to premiums,
especially for family members. As a result, the U.S. Census Bureau reported that
in 1997 approximately 43 million Americans, or approximately 16.1% of the
population, had no health insurance, and most Americans lacked insurance
coverage for one or more ancillary healthcare services. At the same time:
o the average price of prescriptions in the United States has risen from
$12 to $27 over the past ten years and continues to rise at the rate
of 4% per year;
o the average senior citizen takes 3.3 medications every day;
o 60% of all Americans require corrective lenses; 90% of Americans over
the age of 43 require corrective lenses;
o more than 900,000 Americans require medical assistance while traveling
away from home each year;
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<PAGE>
o over 33 million Americans are hearing impaired, but only approximately
6% purchase hearing aids because they consider the cost prohibitive;
o 19 million Americans use chiropractic services each year;
yet, six million Americans did not take health insurance that was offered at
work in 1997.
As a result of the baby boom generation, people over the age of 50
represent the fastest growing segment of the United States population. As the
population ages, more people will need both primary and ancillary healthcare
products and services.
Our Members
Our members generally are part of the following categories of individuals
and organizations:
o uninsured-individuals who cannot or do not wish to incur the expense
of traditional health insurance, especially part-time and temporary
employees, recently graduated students and the self-employed;
o underinsured-individuals covered by a health plan with limited
coverage, high deductibles and/or co-insurance limits, or needing
family coverage;
o insured-individuals seeking providers outside their present health
plans or interested in filling gaps in their coverage;
o uninsurable-individuals who are not eligible for health insurance
because of medical history, profession, lifestyle or other reasons;
o smaller groups-including small businesses, chambers of commerce,
employers of temporary or part-time personnel and other businesses
seeking affordable health benefits for their employees in order to
promote employee loyalty and differentiate their companies in the
marketplace;
o associations-including service organizations and trade groups seeking
to increase membership and promote member/customer loyalty by
providing or offering a discount health benefit.
Primary Medical Services
We offer a network of 450,000 physicians and 6,500 hospitals that provide a
full range of discounted medical services throughout the United States. Almost
75% of the acute care hospitals in the United States are members of our network,
including some of the better known cardiac and transplant hospitals. Our network
consists of over 200 medical specialties, including:
o chemical dependency;
o counseling and rehabilitation;
o chiropractic care;
o infertility;
o marriage and family counseling;
o nutrition;
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<PAGE>
o pain management;
o psychiatry;
o psychology;
o plastic surgery;
o podiatry;
o preventative medicine;
o sleep disorder therapy; and
o speech therapy.
In order to obtain discounts from physicians and hospitals, our members
complete a payment pre- authorization process which will make their medical
visit identical to other medical payment plans, such as insurance plans, HMOs
and the like. Members select a provider from our network, make an appointment
and request an estimate of fees for the anticipated procedure. The member then
calls IMC, our contract partner, to arrange for prepayment using a major credit
card. IMC sends the provider a referral guaranteeing payment based upon a "hold"
we have placed on the member's credit card. The member makes no payment to the
provider at the time services are rendered but simply presents his membership
card. The provider bills IMC, and IMC pays the provider and charges the
discounted amount to the member's credit card. The member subsequently receives
a statement of savings indicating the original amount billed, the amount charged
after savings were applied, and the total amount saved.
Ancillary Services
Our HealthLink discount card provides ancillary healthcare services
including:
Dental. Our dental services and products are designed to provide our
members with discounts of 10% to 40% on dental examinations and dental products
from over 14,300 dentists throughout the United States.
Chiropractic. Our chiropractic services are designed to provide our members
with discounts of 20% to 50% on chiropractic examinations and related
chiropractic services from over 4,700 chiropractors throughout the United
States.
Hearing. Our hearing services are designed to provide our members with
discounts starting at 10% on hearing examinations and hearing products from over
1,700 hearing specialists throughout the United States.
Eye Care. Our eye care services are designed to provide our members with
discounts of 20% to 75% on eye examinations, contact lenses, eyeglass frames and
lenses and eye surgery from over 9,100 eye care specialists throughout the
United States.
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<PAGE>
Pharmacy. Our pharmacy plans include discounts of 20% to 25% on drugs from
over 14,000 mail order pharmacies.
Nurse Information. We provide toll-free telephone access to experienced
registered nurses, 24 hours a day, 365 days per year. Our nurses are an
immediate and reliable source of health and medical information, education and
support.
The purpose of the nurse information service is to give our members
information to assist them in making decisions about their healthcare. In
addition to providing information that may prevent unnecessary trips to the
emergency room, trained nurses assist members in connection with:
o help with minor and emergency situations and general information on
all types of health and medical concerns supported by an audio health
library;
o self-care information and solutions based on physician-approved
guidelines;
o information about prescription and over-the-counter medication usage
and interaction; and
o information on non-medical support groups from a comprehensive
national database.
Legal Services. Our discount card also provides members with discounts for
consumer legal services provided by a network of over 7,000 attorneys throughout
the United States.
Advantages of HealthLink Discount Cards
Advantages to Members. In addition to providing access to healthcare
products and services on a discounted basis, we believe our discount healthcare
cards are attractive to members because of their flexibility and ease of use.
Membership in our healthcare programs is unrestricted and provides benefits to
individuals who, because of their medical history, age or occupation, are unable
to obtain health insurance. The cards cover each person in the member's
immediate family and can be used as often as each participant wishes. In
addition, unlike many insurance or managed care programs, members have no
paperwork or claims to prepare and no waiting periods.
Advantages to Providers and Networks. We believe that physicians, hospitals
and other healthcare providers are attracted to our programs because the
programs increase their customer base. Although members generally pay fees and
charges less than those of non-members, the incremental business from members
offers an additional source of revenue to the providers, with little or no
increase in their overhead costs. In addition, we believe that our programs are
attractive to provider networks because they increase the likelihood that
providers will affiliate with these provider networks in order to have access to
more members.
Advantages to Sponsors. We believe that our discount cards are attractive
to sponsors, that is, organizations with larger memberships or employee bases
that offer healthcare cards to their members or employees. We believe that our
cards assist sponsors in their efforts to attract and retain employees by
enabling them to offer a more complete healthcare benefits package. Similarly,
as competition between HMOs for participants intensifies, we believe that our
cards will enable HMOs to offer a more complete array of potential healthcare
benefits. Due to the low cost of the cards, sponsors may offer them to part-time
employees, who often are not eligible for healthcare benefits offered to
full-time employees. Moreover, because the cards are discount cards and not an
insurance product, sponsors can offer discounts to their employees or members
without bearing any economic risk in excess of the annual cost of the card.
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<PAGE>
Sales and Marketing
We intend to market our benefit savings plans:
Through Purchase Plus. We have entered into an agreement with Purchase Plus
under which we provide the ancillary benefits portion of our benefit savings
plan to members of Purchase Plus for a set annual fee per member. Purchase Plus
purchases the program from us, adds a service charge for handling and sells the
program directly to its members. Purchase Plus is a network marketing company
with over 15,000 members owned by Everett Eugene Armold, who is married to
Cleone W. Armold, a principal stockholder and director of our company. The
agreement is cancellable by either party on 30 days' notice.
Through the Internet. We are developing an English and Spanish language
healthcare benefits Internet Web site at www.healthlinkintl.com which will be
accessible to healthcare providers, sponsors and members. Those accessing the
Web site will be able to review:
o our benefit savings plans;
o a list of our benefits providers and their locations;
o products and services provided by our providers;
o discounts available to members for services and products; and
o special promotions.
Individuals accessing our Web site will also be able to purchase one of our
benefit savings plans by filling out an application online.
We also use banner-style advertisements on drkoop.com, a Web site devoted
to providing consumer medical information and the sale of medical products and
services to the public.
By Developing New Programs. We intend to develop new benefits savings plans
for sale to affinity groups such as large corporations, small business and trade
associations and charitable organizations. Under an affinity card arrangement,
the sponsor would be able to custom design and place its or our name on the
discount card. In either event, we would provide access to our networks, as well
as all required fulfillment services. We believe that affinity or private label
cards will be attractive to some sponsors because the cards will enable them to
more closely identify themselves with the benefits provided to their member.
Moreover, we believe that the preexisting relationship, or affinity, between the
sponsor and its employees or members will enhance the likelihood that the
employee or member will purchase our card.
Through Our In-house Marketing Staff. We intend to establish an in-house
marketing staff to market our benefit savings plans to other large sponsors,
such as insurance carriers, third party administrators, HMOs, preferred provider
organizations and unions.
We expect that these sponsors will either fund the healthcare plans on
behalf of their members or employees so that every eligible individual in the
organization becomes a member or offer the plans to their members or employees
as an option where each individual will be responsible for purchasing the plan
discount card and paying the annual fee either directly or through a payroll
deduction plan. We also expect to market the plan directly to members of
sponsors, particularly in cases where a sponsor offers plan benefits as an
unpaid option to its members.
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<PAGE>
Competition
Our discount healthcare plans compete with the products of various cost
containment marketing organizations for a portion of the health benefit dollars
allocated by various organizations for employee medical benefit programs. These
organizations include:
o preferred provider organizations;
o HMOs;
o insurance companies;
o healthcare membership programs;
o retail pharmacies;
o mail order prescription companies; and
o other ancillary healthcare insurance programs for members and
providers.
With respect to our dental, chiropractic, hearing, eye care and
pharmaceutical products, we compete for sponsors, members and providers,
depending on the geographic area or market, with various entities that have
developed discount membership cards which provide national ancillary medical
benefits coverage, including AT&T, CUC International, and J.C. Penney, and
entities that have developed discount membership cards which provide regional
coverage only. We also compete with various organizations which provide services
and products in specific areas of ancillary healthcare, such as pharmaceutical
services. Most of our competitors have longer operating histories and have
significantly greater financial, marketing and administrative resources than we.
Agreement with Longport
In June 1999, we entered into an agreement with Longport, Inc. under which
we agreed to provide to Longport $5 million over a five-year period to fund
technology enhancements for Longport's digital scanner. The digital scanner is a
portable, high-frequency, ultrasound scanner which captures and reproduces
images of soft tissue at a high resolution down to two centimeters below the
skin, using a laptop computer. Longport received FDA permission to market the
scanner in June 1999.
The $5 million of funding is to be paid at the rate of $360,000 the first
year, $720,000 the second year, $1,440,000 the third and fourth years and
$100,000 per month during the fifth year until the balance of $5 million is
paid. In exchange for this funding, we are to receive 10% of the gross revenue
generated from the scanner enhancements and from new applications of the scanner
until June 2009. We also have the right to finance Longport's cost of producing
its scanners in exchange for 50% of the gross revenue generated by those
scanners. In April 1999, we purchased 350,000 shares of Longport's common stock,
representing approximately 2% of its outstanding shares, for $350,000.
Employees
At October 30, 1999, we had four employees, including our executive
officers.
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Facilities
We sublease from Purchase Plus Buyers Group, Inc., an affiliate,
approximately 1,567square feet of executive office space on a month-to-month
basis in Westerville, Ohio, for $1,639 per month. We believe the lease terms are
fair, reasonable and consistent with lease terms offered by nonaffiliates in the
same market area.
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OUR MANAGEMENT
Officers and Directors
Information concerning each of our executive officers and directors is set
forth below:
Name Age Position
- ---- --- --------
Nicholas G. Venetis 49 Chief Executive Officer, President
and Director
Cleone W. Armold 49 Secretary and Director
Donald M. Pedersen 30 Chief Financial Officer and Director
Paul D. Martin 53 Director
Charles R. Bruce 49 Director
Directors hold office for a period of one year from their election at the
annual meeting of stockholders or until their successors are duly elected and
qualified. Officers are elected by, and serve at the discretion of, the board of
directors. Our audit committee consists of Messrs. Venetis and Bruce.
Nicholas G. Venetis joined us as our Chief Executive Officer, President and
a director in September 1999. From 1995 to 1999, he was President, Chief
Executive Officer and a director of Micrys, Inc., a privately-held company
engaged in the business of semiconductor design. Mr. Venetis earned a BS degree
in Business Administration, with a major in accounting, from The Ohio State
University. He has over 17 years of senior management experience in business
startups, corporate finance and as an executive officer and director of a public
company. His business experience includes implementation and management of
worldwide product distribution, strategic investments, joint ventures, product
development and license agreements with a number of multinational corporations.
Cleone W. Armold joined us as our Secretary and a director in April 1999.
Since 1997, Ms. Armold has been Vice President of Operations for Purchase Plus,
an affiliate, and from 1986 to 1994, was Vice President of Con-Trak Development
Corporation, an Ohio-based construction company. She has also been Chief
Executive Officer of Simba Financial, Inc. since 1994. She earned an associate
degree from Brigham Young University.
Donald M. Pedersen joined us as our Chief Financial Officer and a director
in November 1999. From 1996 to July 1999, he was Vice President of Finance for
JD Services, a privately-held telecommunications company, where he acted as the
company's senior financial officer, responsible for managing the accounting
departments, legal and accounting compliance matters, including preparing the
company for an initial public offering, negotiations with investment bankers and
development of corporate strategies. From 1989 to 1996, Mr. Pedersen was the
Chief Financial Officer and Chief Operating Officer of PAAC, Inc., a nonprofit
corporation engaged in environmental improvement projects. He earned a B.A.
degree in finance from the University of Utah and an MBA degree from the
University of Phoenix. Mr. Pedersen devotes approximately 10% of his time to the
Company's affairs.
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Paul D. Martin joined us as a director in June 1999. Since 1994, he has
been Chief Financial Officer of the Mid-Rivers market area for AON, a
multinational insurance brokerage firm. From 1987 to 1992, he was the Chief
Operating Officer of Willis Corrdon, an international insurance brokerage firm,
and from 1979 to 1981, he was Chief Executive Officer of Reliable Insurance
Company, a Missouri-based life insurance provider. He earned a B.S. degree from
the University of Missouri.
Charles R. Bruce joined us as a director in July 1999. Since July 1999, he
has been Chief Executive Officer of Nubix Corp., a franchise and marketing
company owned by Everett Eugene Armold, the husband of Cleone W. Armold. From
1994 to June 1999, he was Vice President of International Marketing for Wendy's
and from 1986 to 1994 was Vice President of Marketing for the International
Pizza Hut Franchise Holders Association. From 1978 to 1986, he was Export Sales
and Marketing Manager for The Coleman Company. He earned a B.A. degree from
Kansas State University.
Advisory Board
Our Advisory Board consists of the following individuals:
Mary Dyson. Mary Dyson is Emeritus Reader in the Biology of Tissue Repair
at the University of London. She is also a visiting professor in the School of
Health Sciences of the University of Ulster. Ms. Dyson joined the Department of
Anatomy at Guy's Hospital Medical School as a Research Associate in 1964, became
a Lecturer in 1970, a Senior Lecturer in 1975, a Reader in 1987 and an Emeritus
Reader in 1998. She is the author of over 100 research publications in
peer-reviewed journals, is one of the editors of the 37th and 38th editions of
Gray's Anatomy and has contributed to textbooks on wound healing, physiotherapy
and ultrasound. She is a member of the editorial board of a number of healthcare
related journals and has presented over 220 lectures in Europe and North America
on topics which include diagnostic and therapeutic ultrasound, electrotherapy,
wound healing, tissue repair and regeneration, and injury and repair-related
aspects of sports medicine. Ms. Dyson holds a Bachelor of Science degree and a
Ph.D. degree in biology from Bedford College at the University of London. She is
the Director of Research and Development for Longport, Inc., one of our contract
partners, and is expected to provide us assistance in connection with the
development of the Longport digital scanner.
Courtney H. Lyder. Courtney H. Lyder has been an Associate Professor of
Geriatric Nursing and Gerontology at the Yale University School of Nursing since
1994. From 1991 to 1994, Dr. Lyder was an Assistant Professor of Gerontological
Nursing and family nurse practitioner programs at St. Xavier University School
of Nursing. He is the author of numerous scientific articles on skin and wound
care and scientific presentations on wound care and nursing. Dr. Lyder has also
been the recipient of project funding for a number of research projects
involving skin and wound care. He earned Bachelor of Science, Master of Science
and Doctor of Nursing degrees from Rush University College of Nursing and a
Bachelor of Arts degree from Beloit College majoring in psychology and nursing.
Dimitrios G. Spigos. Dimitrios G. Spigos has been a professor and the
chairman of the Department of Radiology of Ohio State University since 1992.
From 1986 to 1992, he was chairman of the Department of Radiology for Cook
County Hospital, and from 1982 to 1990, was also a professor of Radiology at the
University of Illinois. He is the author of over 120 medical book chapters on
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radiology and related medical subjects and has presented almost 100 abstracts at
scientific conventions and seminars throughout the world. He has also been
invited to speak at more than 120 medical departmental seminars and meetings
since 1976. Dr. Spigos received his M.D. degree from the University of Athens,
interned at Mount Sinai Hospital in Chicago and was a resident in radiology at
the University of Illinois.
Executive Compensation
None of our executive officers or directors were paid compensation for
services in 1998. We have not signed employment agreements with any of our
executive officers. None of our executive officers is expected to receive total
compensation in excess of $100,000 during 1999.
Our outside directors receive $250 for each Board meeting attended, are
reimbursed for out-of-pocket expenses in attending board meetings and may be
issued stock options in the future.
Stock Option Plan
We have a stock option plan which provides for the grant of options
intended to qualify as "nonqualified stock options" within the meaning of
Section 422 of the United States Internal Revenue Code of 1986 (the "Code").
The purposes of the plan are to attract and retain the best available
personnel, to provide additional incentives to our employees and to promote the
success of our business.
We have reserved 1,000,000 shares of common stock for issuance under the
plan, which is administered by our board of directors. To date, no stock options
have been issued. Under the plan, the board determines which individuals will
receive options, the time period during which the options may be partially or
fully exercised, the number of shares of common stock that may be purchased
under each option and the option price.
The per share exercise price of the common stock subject to options must
not be less than the fair market value of the common stock on the date the
option is granted. The stock options are subject to anti-dilution provisions in
the event of stock splits, stock dividends and the like.
No stock options are transferable by an optionee other than by will or the
laws of descent and distribution, and during the lifetime of an optionee, the
option is only exercisable by the optionee. The exercise date of an option
granted under the plan must not be later than ten years from the date of grant.
Any options that expire unexercised or that terminate upon an optionee's ceasing
to be employed by us will become available once again for issuance. Shares
issued upon exercise of an option rank equally with other shares then
outstanding. To date, no options have been granted under the plan.
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OUR PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the holdings
of common stock by (1) each person who holds of record or is known by us to hold
beneficially or of record, more than 5% of our common stock, (2) each executive
officer and director, and (3) all officers and directors as a group. The address
of each person is in care of our address at 929 Eastwind Drive, Suite 225,
Westerville, Ohio 43081.
<TABLE>
<CAPTION>
Percent Percent
Shares of Class of Class
Name Owned Prior to Offering After Offering
---- ----- ----------------- --------------
<S> <C> <C> <C>
Nicholas G. Venetis 300,000 2.5% 2.0%
Cleone W. Armold 9,528,448 80.5% 64.2%
Donald M. Pedersen -0- 0 % 0 %
Paul D. Martin 34,483 .3% .2%
Charles R. Bruce 8,621 .1% .1%
All executive officers and
directors as a group
(5 persons) 9,871,552 83.4% 66.5%
</TABLE>
RELATED PARTY AND OTHER MATERIAL TRANSACTIONS
In July 1999, we entered into an agreement with Purchase Plus under which
we agreed to provide the ancillary benefits portion of our benefits savings plan
to members of Purchase Plus. Purchase Plus purchases the benefits program from
us, adds a service charge for handling and sells the program directly to its
members. Everett Eugene Armold, who controls Purchase Plus, is the husband of
Cleone W. Armold, one of our directors. Two of our officers and directors, Ms.
Armold and Mr. Pedersen, are also officers and directors of Purchase Plus.
In April 1999, we purchased 350,000 shares of Longport, Inc. common stock
for $1.00 per share. In June 1999 we entered into an agreement with Longport
under which we agreed to provide to Longport $5 million over a five-year period
to fund technology enhancements for Longport's digital scanner in exchange for
10% of the gross revenue generated from the scanner enhancements and related new
technology until 2009. We also have the right to finance the manufacture of
scanners in exchange for 50% of the revenue generated by those scanners.
We lease 1,567 square feet of office space from Purchase Plus Buyers Group,
Inc. on a month-to-month lease for $1,639 per month.
In October 1999, Simba Financial Incorporated, a company in which Mr.
Armold is a principal stockholder, provided us with a $500,000 line of credit to
finance our operating expenses and working capital. Funds advanced under the
line of credit will bear interest at 10% per annum and are due for repayment on
December 31, 2000. As of this date, no funds have yet been advanced to us under
the line of credit.
In our opinion, the transactions described above were on terms no less
favorable than those which could have been obtained from unaffiliated third
parties.
28
<PAGE>
DESCRIPTION OF OUR SECURITIES
Units
Each unit consists of one share of common stock and one redeemable warrant.
Common Stock
We are authorized to issue 100,000,000 shares of $.001 par value common
stock, of which 11,839,827 shares are currently outstanding. Each share of
common stock is entitled to one vote on all matters submitted to a vote of the
stockholders, and cumulative voting is not permitted. Upon issuance, shares of
common stock are not subject to further assessment or call. Subject to the prior
rights of any series of preferred stock that may be issued by us in the future,
holders of common stock are entitled to receive ratably such dividends that may
be declared by the board of directors out of funds legally available therefor
and are entitled to share ratably in all assets remaining after payment of
liabilities in the event of our liquidation, dissolution or winding up. Holders
of common stock have no preemptive rights or rights to convert their common
stock into any other securities. The outstanding common stock is fully paid and
nonassessable.
We have not paid dividends on our common stock since inception and do not
plan to pay dividends in the foreseeable future. Any earnings will be retained
to finance growth.
Redeemable Warrants
Each warrant represents the right to purchase one share of common stock at
an initial exercise price of $5.00 per share until December 31, 2002. The
exercise price and the number of shares issuable upon exercise of the warrants
are subject to adjustment in certain events, including the issuance of common
stock as a dividend on shares of common stock, subdivisions or combinations of
the common stock or similar events. The warrants do not contain provisions
protecting against dilution resulting from the sale of additional shares of
common stock for less than the exercise price of the warrants or the current
market price of common stock.
Warrants may be redeemed, in whole or in part, at our option, upon 30 days'
notice, at a redemption price equal to $.01 per warrant if the closing price of
our common stock is at least $6.00 per share or more for ten consecutive trading
days.
Holders of warrants may exercise them only if a current prospectus relating
to the underlying common stock is then in effect and only if the shares are
qualified for sale, or deemed to be exempt from qualification, under applicable
state securities laws.
The shares of common stock issuable on exercise of the warrants will be,
when issued, fully paid and non-assessable. The holders of the warrants have no
rights as stockholders until they exercise their warrants.
29
<PAGE>
Preferred Stock
Our articles of incorporation authorize the issuance of up to 1,000,000
shares of no par value preferred stock with such rights and preferences as may
be determined from time to time by our board of directors. Accordingly, under
the articles of incorporation, the board of directors may, without stockholder
approval, issue preferred stock with dividend, liquidation, conversion, voting,
redemption or other rights which could adversely affect the voting power or
other rights of the holders of the common stock. The issuance of any shares of
preferred stock having rights superior to those of the common stock may result
in a decrease of the value or market price of the common stock and could further
be used by the board of directors as a device to prevent a change in our
control. We have no other anti-takeover provisions in our articles of
incorporation or bylaws. Holders of the preferred stock may have the right to
receive dividends, certain preferences in liquidation and conversion rights.
Shares Eligible for Future Sale
Prior to this offering, there has been no public market for our common
stock. Future sales of substantial amounts of common stock in the public market
could adversely affect prevailing market prices.
Upon completion of this offering, we will have outstanding 14,839,827
shares of common stock. Of these shares, the 3,000,000 shares sold in the
offering will be freely tradable without restriction under the Securities Act,
unless purchased by our "affiliates" as that term is defined in Rule 144 under
the Securities Act, generally, our officers, directors or 10% stockholders.
The remaining 11,839,827 shares outstanding are "restricted securities"
within the meaning of Rule 144 under the Securities Act. Restricted securities
may be sold in the public market only if registered or if they qualify for an
exemption from registration under Rule 144 of the Securities Act. A total of
11,474,310 shares may be sold under Rule 144 between March and July 2000, and
the remaining 365,517 shares may be sold commencing November 2000. Sales of
restricted securities in the public market, or the availability of such
securities for sale, could adversely affect the market price of the common
stock.
In general, under Rule 144, a person who has beneficially owned restricted
securities for at least one year would be entitled to sell within any
three-month period a number of shares that does not exceed the greater of one
percent of the number of shares of common stock then outstanding, which will
amount to 148,398 shares immediately after the offering, or the average weekly
trading volume of the common stock during the four calendar weeks preceding the
sale. Sales under Rule 144 are also subject to certain manner of sale provisions
and notice requirements and to the availability of current public information
about us. Under Rule 144(k), a person who is not deemed to have been our
affiliate at any time during the three months preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least two years, is
entitled to sell these shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144.
Transfer Agent
Corporate Stock Transfer, Inc., Denver, Colorado, is our transfer agent.
The transfer agent's address is 3200 Cherry Creek Drive South, #430, Denver,
Colorado 80209, and its telephone number is (303) 282-4800.
30
<PAGE>
Limitation on Liability
Our bylaws provide our directors, officers, employees and agents with
substantial protection against personal liability related to actions taken in
their capacity as our representatives. The effect of these provisions is that we
may be required to pay reasonably incurred expenses such as attorney's fees,
judgments, penalties, fines and amounts paid in settlements associated with work
related actions, suits or proceedings. We must pay these expenses if we find
that the individual acted in good faith and in our best interests.
PLAN OF DISTRIBUTION
We are offering a minimum of 1,000,000 units and a maximum of 3,000,000
units on a best efforts basis directly to the public through our officers and
directors, as well as through securities brokers-dealers who are members of the
NASD. Our officers and directors will not receive any compensation for assisting
us with the offering, but NASD members will receive a commission of $.30 for
each unit sold. No broker-dealer has agreed to participate in the offering as of
the date of this prospectus.
We may provide NASD members who participate in the offering with a list of
persons whom we believe may be interested in purchasing units. These NASD
members may sell a portion of the units to such persons.
Upon sale of the minimum 1,000,000 units, we will apply to list our common
stock and warrants, but not our units, on the Electronic Bulletin Board. Unless
and until the securities are accepted for listing, no public market will develop
for the resale of the securities.
Prior to this offering, there has been no market for our securities.
Accordingly, the public offering price for the units was determined solely by
us. Among the factors we considered in determining the public offering price
were our record of operations, our current financial condition, our future
prospects, the background of our management and the general condition of the
equity securities market.
Method of Subscribing
Persons may subscribe by completing and returning our subscription
agreement. The offering price of $3.00 per unit must accompany the subscription
agreement. The minimum purchase is 100 units for $300. Certificates for the
units subscribed will be issued within three business days following the closing
of the offering.
Selling Period
The selling period of the offering will terminate 90 days from the date of
this prospectus unless extended for up to an additional 60 days, or on such
earlier date as we shall determine in our discretion.
Minimum-Maximum and Escrow
Until the minimum 1,000,000 units are sold, all funds will be deposited in
a non-interest bearing escrow account at Bank One, 701 Brooksedge Plaza Dr.,
Westerville, Ohio 43081. In the event that 1,000,000 units are not sold during
the 90-day selling period, which may be extended for an additional 60 days, all
31
<PAGE>
funds will be returned to investors without deduction or interest. If 1,000,000
units are sold, we may either continue the offering for the remainder of the
selling period or close the offering at any time.
Right to Reject
We reserve the right to reject any subscription, and to withdraw the
offering at any time prior to acceptance of the subscriptions received, if
acceptance of a subscription would result in the violation of any laws to which
we are subject.
LEGAL MATTERS
Certain legal matters in connection with the offering will be passed upon
for us by the Law Office of Gary A. Agron, Englewood, Colorado.
EXPERTS
Our financial statements for the years ended December 31, 1998 and 1997
have been included in this prospectus in reliance on the report of Angell &
Deering, independent public accountants, as given upon the authority of said
firm as experts in accounting and auditing. Angell & Deering have not audited or
reviewed the unaudited interim financial information and have not expressed an
opinion or any other form of assurance with respect to such financial
information.
ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission a Registration
Statement under the Securities Act of 1933, as amended, covering the common
stock and warrants. As permitted by the rules and regulations of the Commission,
this prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits. For further information with respect to
our company and our securities, reference is made to the Registration Statement
and the exhibits, which may be examined without charge at the public reference
facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street
N.W., Washington, D.C. 20549, copies of which may be obtained from the
Commission upon payment of the prescribed fees.
We will be subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and will file reports, proxy statements and
other information with the Commission. Such reports, proxy statements and other
information may be inspected at the public reference facilities of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
Copies of these materials may be obtained at prescribed rates from the
Commission at that address. The reports, proxy statements and other information
can also be inspected at the Commission's regional offices at 7 World Trade
Center, Suite 300, New York, New York 10048 and at Northwestern Atrium Center,
500 West Madison, Chicago, Illinois 60621 and on the Commission's Web site at
www.sec.gov.
We will furnish to our stockholders annual reports which will include
audited financial statements. We may also furnish to our stockholders quarterly
financial statements and other reports that may be authorized by our board of
directors.
32
<PAGE>
HEALTHLINK INTERNATIONAL, INC.
INDEX TO FINANCIAL STATEMENTS
Financial Statements Page
- -------------------- ----
Independent Auditors' Report F-2
Balance Sheets as of June 30, 1999 (unaudited) and
December 31, 1998 F-3
Statements of Operations for the six months ended
June 30, 1999 and 1998 (unaudited) and for the years
ended December 31, 1998 and 1997 F-4
Statements of Changes in Stockholders' Equity for the
six months ended June 30, 1999 (unaudited) and for
the years ended December 31, 1998 and 1997 F-5
Statements of Cash Flows for the six months ended
June 30, 1999 and 1998 (unaudited) and for the years
ended December 31, 1998 and 1997 F-6
Notes To Financial Statements F-7
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
HealthLink International, Inc.
We have audited the accompanying balance sheet of HealthLink International, Inc.
as of December 31, 1998 and the related statements of operations, changes in
stockholders' equity and cash flows for the years ended December 31, 1998 and
1997. 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 audits.
We conducted our audits 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 audits provide 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 HealthLink International, Inc.
as of December 31, 1998 and the results of its operations and its cash flows for
the years ended December 31, 1998 and 1997 in conformity with generally accepted
accounting principles.
Angell & Deering
Certified Public Accountants
Denver, Colorado
July 30, 1999, except for Note 6
and the last two paragraphs of
Note 12 as to which the date is
October 28, 1999
F-2
<PAGE>
<TABLE>
<CAPTION>
HEALTHLINK INTERNATIONAL, INC.
BALANCE SHEETS
ASSETS
------
June 30, December 31,
1999 1998
----------- ------------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ -- $ --
Accounts receivable - related entities -- 75
----------- -----------
Total Current Assets -- 75
----------- -----------
Other Assets:
Marketable securities 1,553,125 --
----------- -----------
Total Other Assets 1,553,125 --
----------- -----------
Total Assets $ 1,553,125 $ 75
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable - related entities $ 12,738 $ --
----------- -----------
Total Current Liabilities 12,738 --
----------- -----------
Commitments and Contingencies -- --
Stockholders' Equity:
Preferred stock: no par value, 1,000,000 shares
authorized, none issued or outstanding -- --
Common stock: $.001 par value, 100,000,000 shares
authorized, 11,465,689 and 10,344,827 shares issued
and outstanding 11,466 10,345
Additional paid in capital 491,994 (10,345)
Retained earnings (deficit) (166,198) 75
Accumulated other comprehensive income 1,203,125 --
----------- -----------
Total Stockholders' Equity 1,540,387 75
----------- -----------
Total Liabilities and Stockholders' Equity $ 1,553,125 $ 75
=========== ===========
The accompanying notes are an integral
part of these financial statements.
F-3
<PAGE>
HEALTHLINK INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
Six Months Ended Year Ended
June 30, December 31,
-------- ------------
1999 1998 1998 1997
---- ---- ---- ----
(Unaudited)
Net sales $ 108,069 $ -- $ 8,242 $ --
Cost of sales 90,695 -- 6,917 --
------------ ------------ ------------ ------------
Gross Profit 17,374 -- 1,325 --
Operating expenses 122,520 -- 1,250 --
Research and development 60,000 -- -- --
------------ ------------ ------------ ------------
Income (Loss) Before Provision
For Income Taxes (165,146) -- 75 --
Provision for income taxes -- -- -- --
------------ ------------ ------------ ------------
Net Income (Loss) $ (165,146) $ -- $ 75 $ --
============ ============ ============ ============
Net Income (Loss) Per Share
of Common Stock:
Basic $ (.01) $ -- $ -- $ --
Diluted $ (.01) $ -- $ -- $ --
Weighted Average Number of
Common Shares Outstanding:
Basic 11,465,689 11,465,689 11,465,689 11,465,689
Diluted 11,465,689 11,465,689 11,465,689 11,465,689
The accompanying notes are an integral
part of these financial statements.
F-4
<PAGE>
HEALTHLINK INTERNATIONAL, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
Accumulated
Common Stock Additional Current Years Retained Other
------------ Paid In Comprehensive Earnings Comprehensive
Shares Amount Capital Income (Deficit) Income
------ ------ ------- ------ --------- ------
Balance at December 31, 1996 10,344,827 $ 10,345 $ (10,345) $ -- $ --
Net income -- -- -- $ -- -- --
-----------
Total Comprehensive Income -- -- -- $ -- -- --
----------- ----------- ----------- =========== ----------- -----------
Balance at December 31, 1997 10,344,827 10,345 (10,345) -- --
Net income -- -- -- $ 75 75 --
-----------
Total Comprehensive Income -- -- -- $ 75 -- --
----------- ----------- ----------- =========== ----------- -----------
Balance at December 31, 1998 10,344,827 10,345 (10,345) 75 --
Capital contributions -- -- 498,000 -- --
Shares of common stock issued in
March and April for services
valued at $.0029 per share (unaudited) 1,036,208 1,036 1,969 -- --
Shares of common stock issued in
May and June for services valued
at $.029 per share (unaudited) 84,654 85 2,370 -- --
Net loss (unaudited) -- -- -- $ (165,146) (165,146) --
Other comprehensive income, net of tax:
Unrealized gain on securities (unaudited) -- -- -- 1,203,125 -- --
-----------
Other Comprehensive Income (unaudited) -- -- -- 1,203,125 -- 1,203,125
-----------
Total Comprehensive Income (unaudited) -- -- -- $ 1,037,979 -- --
===========
Distribution (unaudited) -- -- -- (1,127) --
----------- ----------- ----------- ----------- -----------
Balance at June 30, 1999 (unaudited) 11,465,689 $ 11,466 $ 491,994 $ (166,198) $ 1,203,125
=========== =========== =========== =========== ===========
The accompanying notes are an integral
part of these financial statements.
F-5
<PAGE>
HEALTHLINK INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
Six Months Ended Year Ended
June 30, December 31,
-------- ------------
1999 1998 1998 1997
---- ---- ---- ----
(Unaudited)
Cash Flows From Operating Activities:
Net income (loss) $(165,146) $-- $ 75 $--
Adjustments to reconcile net income (loss) to net cash
(used) by operating activities:
Write off of note receivable 88,000 -- -- --
Common stock issued for services 5,460 -- -- --
--------- ---- --------- ----
Net Cash (Used) By Operating Activities (71,686) -- 75 --
--------- ---- --------- ----
Cash Flows From Investing Activities:
(Increase) decrease in receivable from related entities 75 -- (75) --
Increase in payable to related entities 12,738 -- -- --
Investment in marketable securities (350,000) -- -- --
Advances to corporation (88,000) -- -- --
--------- ---- --------- ----
Net Cash (Used) By Investing Activities (425,187) -- (75) --
--------- ---- --------- ----
Cash Flows From Financing Activities:
Contributed capital 498,000 -- -- --
Distribution to stockholders (1,127) -- -- --
--------- ---- --------- ----
Net Cash Provided By Financing Activities 496,873 -- -- --
--------- ---- --------- ----
Net Increase (Decrease) in Cash and Cash Equivalents -- -- -- --
Cash and Cash Equivalents at Beginning of Period -- -- -- --
--------- ---- --------- ----
Cash and Cash Equivalents at End of Period $ -- $-- $ -- $--
========= ==== ========= ====
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest $ -- $-- $ -- $--
Income taxes -- -- -- --
The accompanying notes are an integral
part of these financial statements.
F-6
</TABLE>
<PAGE>
HEALTHLINK INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
1. Organization and Summary of Significant Accounting Policies
------------------------------------------------------------
Organization
-------------
HealthLink International, Inc., formerly Commercial Building Systems,
Inc., (the "Company") was incorporated in Nevada on November 17, 1994.
The Company had no operations until March 1999.
The Company offers Benefit Savings Plans, which allow holders to pay
reduced prices or to receive a savings on health care and other
related products and services designed to create a healthy lifestyle.
These plans are arranged with an emphasis on health care, and leisure
programs for seniors, the handicapped, and students. Members receive a
discount benefit card, which they present for verification for
membership and point-ofpurchase savings. The Company also intends to
explore numerous ventures in the health care industry.
Basis of Presentation
---------------------
The financial statements reflect the results of operations, financial
position, changes in stockholders' equity and cash flows of the
business segment that was transferred to the Company from Purchase
Plus Buyers Group, Inc. ("Purchase Plus") as if the Company were a
separate entity for all periods presented. The financial statements
have been prepared using the historical basis in the assets and
liabilities and historical results of operations related to the
business segment. Changes in additional paid in capital represent
Purchase Plus's contribution of its net investment after giving effect
to the net income (loss) of the Company plus net cash transfers to or
from Purchase Plus. The Company will begin accumulating its retained
earnings on April 1, 1999, the date on which the Agreement with
Purchase Plus is effective (Note 9).
Additionally, the financial statements include allocations of certain
Purchase Plus operating expenses relating to the business segment that
was transferred to the Company from Purchase Plus. Management believes
these allocations are reasonable. However, the costs of these services
charged to the Company are not necessarily indicative of the costs
that would have been incurred if the Company had performed these
functions using its own resources or purchased services from an
unrelated third party.
The financial statements included herein may not necessarily reflect
the results of operations, financial position, changes in
stockholders' equity and cash flows of the Company in the future or
what they would have been had it been a separate, stand-alone entity
during the periods presented.
Unaudited Interim Financial Statements
--------------------------------------
The financial statements as of June 30, 1999 and for the six months
ended June 30, 1999 and 1998 are unaudited, however, in the opinion of
management of the Company, all adjustments (consisting solely of
normal recurring adjustments) necessary to a fair presentation of the
financial statements for the interim periods have been made.
Marketable Securities
---------------------
Marketable securities consist of common stock. Marketable securities
are stated at market value as determined by the most recently traded
price of each security at the balance sheet date. All marketable
securities are defined as trading securities or available-for-sale
securities under the provisions of Statement of Financial Accounting
Standards No. ("SFAS") 115, "Accounting for Certain Investments in
Debt and Equity Securities."
F-7
<PAGE>
HEALTHLINK INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
1. Organization and Summary of Significant Accounting Policies (Continued)
-----------------------------------------------------------------------
Marketable Securities (Continued)
---------------------------------
Management determines the appropriate classification of its
investments in marketable securities at the time of each purchase and
re-evaluates such determination at each balance sheet date. Securities
that are bought and held principally for the purpose of selling them
in the near term are classified as trading securities and unrealized
holding gains and losses are included in earnings. Debt securities for
which the Company does not have the intent or ability to hold to
maturity and equity securities are classified as available-for-sale.
Available-for-sale securities are carried at fair value, with the
unrealized gains and losses, net of tax, reported as a separate
component of stockholders' equity. The cost of investments sold is
determined on the specific identification or the first-in, first-out
method.
Revenue Recognition
-------------------
Revenue is generally recognized on the sales of products or services
when the products are delivered or the services performed, all
substantial contractual obligations have been satisfied, and the
collection of the resulting receivable is deemed probable.
Stock-Based Compensation
------------------------
The Company adopted Statement of Financial Accounting Standard (SFAS)
No. 123, "Accounting for Stock-Based Compensation". The Company will
measure compensation expense for its stock-based employee compensation
plans using the intrinsic value method prescribed by APB Opinion No.
25, "Accounting for Stock Issued to Employees".
Long-Lived Assets
-----------------
In accordance with Statement of Financial Accounting Standards (SFAS)
No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of", the Company reviews for the
impairment of long-lived assets and certain identifiable intangibles,
whenever events or changes in circumstances indicate that the carrying
value of an asset may not be recoverable. An impairment loss would be
recognized when the estimated future cash flows is less than the
carrying amount of the assets. No impairment losses have been
identified by the Company.
Income Taxes
------------
Deferred income taxes are provided for temporary differences between
the financial reporting and tax basis of assets and liabilities using
enacted tax laws and rates for the years when the differences are
expected to reverse.
Net Income (Loss) Per Share of Common Stock
-------------------------------------------
As of December 31, 1997, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 128, "Earnings Per Share", which
specifies the method of computation, presentation and disclosure for
earnings per share. SFAS No. 128 requires the presentation of two
earnings per share amounts, basic and diluted.
Basic earnings per share is calculated using the average number of
common shares outstanding. Diluted earnings per share is computed on
the basis of the average number of common shares outstanding plus the
dilutive effect of outstanding stock options using the "treasury
stock" method.
F-8
<PAGE>
HEALTHLINK INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
1. Organization and Summary of Significant Accounting Policies (Continued)
----------------------------------------------------------------------
Net Income (Loss) Per Share of Common Stock (Continued)
------------------------------------------------------
The basic and diluted earnings per share are the same since the
Company had no options or warrants outstanding in 1998 and 1997.
Cash and Cash Equivalents
-------------------------
For purposes of the statements of cash flows, the Company considers
all highly liquid investments with a maturity of three months or less
at the date of purchase to be cash equivalents.
Estimates
---------
The preparation of the Company's financial statements in conformity
with generally accepted accounting principles requires the Company's
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amount of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
2. Marketable Securities
---------------------
Marketable securities are carried on the balance sheet at their market
value.
Unrealized Market
Cost Gain (Loss) Value
---- ----------- -----
As of June 30, 1999 (unaudited):
Available-for-sale securities:
Equity securities $350,000 $1,203,125 $1,553,125
-------- ---------- ----------
Total $350,000 $1,203,125 $1,553,125
======== ========== ==========
3. Income Taxes
------------
The components of the provision for income taxes for the years ended
December 31, 1998 and 1997 are as follows:
1998 1997
---- ----
Current:
Federal $ -- $ --
State -- --
------ ------
Total -- --
------ ------
Deferred:
Federal -- --
State -- --
------ ------
Total -- --
------ ------
Total Provision For Income Taxes $ -- $ --
====== =======
The provision (benefit) for income taxes reconciles to the amount
computed by applying the federal statutory rate to income before the
provision (benefit) for income taxes as follows:
F-9
<PAGE>
HEALTHLINK INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
3. Income Taxes (Continued)
------------------------
1998 1997
---- ----
Federal statutory rate 34% 34%
State income taxes, net of federal benefits 8 8
Valuation allowance -- --
Other -- --
--- ---
Total 42% 42%
=== ===
The following is a reconciliation of the provision for income taxes to
income before provision for income taxes computed at the federal
statutory rate of 34%.
1998 1997
---- ----
Income taxes at the federal statutory rate $ 26 $ --
State income taxes, net of federal benefits 6 --
Other (32) --
---- ----
Total $ -- $ --
===== ====
4. Accumulated Other Comprehensive Income
--------------------------------------
In June 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard (SFAS) No. 130 "Reporting
Comprehensive Income" which the Company adopted in the first quarter
of 1998. SFAS No. 130 requires presentation of comprehensive income
and its components in the financial statements. Components of other
comprehensive income consist of the following:
<TABLE>
<CAPTION>
Accumulated
Unrealized Other
Gains/(Losses) Comprehensive
on Securities Income (Loss)
------------- -------------
<S> <C> <C>
Balance at December 31, 1996 $ -- $ --
1997 change -- --
---------- ----------
Balance at December 31, 1997 -- --
1998 change -- --
---------- ----------
Balance at December 31, 1998 -- --
1999 change (unaudited) 1,203,125 1,203,125
---------- ----------
Balance at June 30, 1999 (unaudited) $1,203,125 $1,203,125
========== ==========
</TABLE>
5. Stockholders' Equity
--------------------
Amendment to Authorized Common Shares
-------------------------------------
In March 1999, the Company's Board of Directors authorized, and the
shareholders approved, an amendment of the Company's Articles of
Incorporation, to increase the number of authorized shares of common
stock from 25,000 to 100,000,000 with a par value of $.001. The
Company also authorized 1,000,000 shares of preferred stock with no
par value.
F-10
<PAGE>
HEALTHLINK INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
5. Stockholders' Equity (Continued)
-------------------------------
Amendment to Authorized Common Shares (Continued)
------------------------------------------------
In March 1999, the Company's stockholders returned their 900 shares of
common stock, representing all of the outstanding common stock of the
Company, in exchange for 30,000,000 newly issued shares of common
stock. This transaction has been accounted for as a stock split and
all share information and per share data have been retroactively
restated for all periods presented to reflect the stock split.
Initial Public Offering
-----------------------
The Company is in the process of filing a registration statement with
the Securities and Exchange Commission for an initial public offering
("IPO") of 3,000,000 units of the Company's securities at a price of
$3.00 per unit without the assistance of an underwriter. The Company
is offering a minimum of 1,000,000 units and a maximum of 3,000,000
units. Until 1,000,000 units are sold all funds will be placed in a
non-interest bearing escrow account. If 1,000,000 units are not sold
within 90 days from the date of the Registration Statement all funds
will be returned to the investors without interest. Each unit consists
of one share of the Company's common stock and one redeemable common
stock purchase warrant. Each warrant is exercisable to purchase one
share of common stock at $5.00 per share until December 31, 2002. The
warrants may be redeemed by the Company for $.01 per warrant if the
closing price of the common stock is at least $6.00 per share for ten
consecutive trading days.
6. Stock Options and Warrants
--------------------------
Stock Option Plan
-----------------
The Company adopted a stock option plan (the "Plan"), effective as of
November 15, 1999, which provides for the grant of non-qualified stock
options. A total of 1,000,000 shares of common stock have been
reserved for issuance under the Plan.
Options under the Company's plan are issuable only to eligible
officers, directors, key employees and consultants of the Company. The
Plan is administered by a committee selected by the Board of
Directors, which determines those individuals who shall receive
options, the time period during which the options may be exercised,
the number of shares of common stock that may be purchased under each
option, and the option price. Unless sooner terminated, the Plan shall
remain in effect until December 31, 2009.
The per share exercise price of the common stock may not be less than
the fair market value of the common stock on the date the option is
granted. The stock options are subject to anti-dilution provisions in
the event of stock splits, stock dividends and the like.
No stock options are transferrable by an optionee other than by will
or the laws of descent and distribution, and during the lifetime of an
optionee, the option is only exercisable by the optionee. The exercise
date of an option granted under the Plan must not be later than ten
years from the date of grant. Any options that expire unexercised or
that terminate upon an optionee's ceasing to be employed by the
Company will become available once again for issuance.
7. Preferred Stock
---------------
The authorized preferred stock of the Company consists of 1,000,000
shares, no par value. The preferred stock may be issued in series from
time to time with such designation, rights, preferences and
F-11
<PAGE>
HEALTHLINK INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
7. Preferred Stock (Continued)
--------------------------
limitations as the Board of Directors of the Company may determine by
resolution. The rights, preferences and limitations of separate series
of preferred stock may differ with respect to such matters as may be
determined by the Board of Directors, including without limitation,
the rate of dividends, method and nature of payment of dividends,
terms of redemption, amounts payable on liquidation, sinking fund
provisions (if any), conversion rights (if any), and voting rights.
Unless the nature of a particular transaction and applicable statutes
require approval, the Board of Directors has the authority to issue
these shares without shareholder approval.
8. Commitments and Contingencies
-----------------------------
Technology Enhancement and Marketing Agreement
----------------------------------------------
The Company entered into a Technology Enhancement and Marketing
Agreement (the "Agreement") with a corporation in June 1999. The
Company has agreed to fund $5,000,000 for research for biomedical
technology enhancements to the corporation's digital scanner
technologies. The two companies will share in the proceeds from the
sale or lease of any enhancements and new applications of the digital
scanner developed as a result of the research funded by the Company.
The Company will receive from the corporation ten percent of the gross
revenues from the sale or lease of any enhancements and new
applications of the digital scanner developed as a result of the
research funded by the Company under the Agreement for a period of ten
years. In addition, the corporation will give the Company the
opportunity to finance up to fifty percent of the digital scanners
produced and from each digital scanner produced and financed by the
Company, the corporation and the Company will share equally in the
lease income of $2,000 per month. The Agreement is effective June 1,
1999 and the Company shall provide the funding in increments of
$30,000 a month for the first year, $60,000 a month for the second
year, $120,000 a month for the third and fourth years and $100,000 a
month for the fifth year until a total of $5,000,000 is paid under the
Agreement.
The Year 2000
-------------
The Company is currently working to resolve the potential impact of
the Year 2000 on the processing of date-sensitive information by the
Company's computerized information systems. The Year 2000 problem is
the result of computer programs being written using two digits (rather
than four) to define the applicable year. Any of the Company's
programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000, which could result in
miscalculations or system failures. Costs of addressing potential
problems are expensed as incurred and are not expected to have a
material adverse impact on the Company's financial position, results
of operations or cash flows in future periods. However, if the Company
or its vendors are unable to resolve such processing issues in a
timely manner, it could result in a material financial risk.
Accordingly, the Company plans to devote the necessary resources to
resolve all significant Year 2000 issues in a timely manner. While the
Company does not at this time anticipate significant problems with
suppliers and customers, it has not developed Year 2000 contingency
plans, other than the review and remedial actions described above and
does not intend to do so unless it believes such plans are merited by
the results of its continuing Year 2000 review.
F-12
<PAGE>
HEALTHLINK INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
9. Related Party Transactions
--------------------------
The Company occupies office space which is shared by seven entities
that are related through common ownership. The Company rents the
office space on a month to month basis and is allocated one seventh of
the lease cost on a monthly basis.
The Company entered into a two year agreement with Purchase Plus in
April 1999 to purchase various benefits from Purchase Plus. In
connection with this agreement, the Company has agreed with Purchase
Plus to manage the health care benefits which Purchase Plus purchases
from an unrelated insurance company. The Company will provide these
health care benefits to Purchase Plus for $25.44 per year for each
individual that is enrolled in such programs. The Company purchases
the benefits from the insurance company utilizing Purchase Plus as the
intermediary. In the future, the Company intends to contract directly
with the insurance company to purchase the benefits.
In July 1999, the Company entered into a new two year agreement with
Purchase Plus to provide various health care benefits from the
Company. The Company will provide these health care benefits to
Purchase Plus for $32.35 per year for each individual that is enrolled
in such programs. The Company purchases the benefits directly from
insurance companies and other providers under the terms of the new
agreement.
The Company has an account receivable from Purchase Plus of $75 at
December 31, 1998.
10. Concentration of Credit Risk
----------------------------
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of temporary cash
investments and accounts receivable. The Company places its cash
equivalents and short term investments with high credit quality
financial institutions and limits its credit exposure with any one
financial institution. The Company provides credit in the normal
course of business. The Company performs periodic credit evaluations
of its customers' financial condition and generally requires no
collateral. The Company maintains reserves for potential credit
losses, and such losses have not exceeded management's expectations.
11. Fair Value of Financial Instruments
-----------------------------------
Disclosures about Fair Value of Financial Instruments for the
Company's financial instruments are presented in the table below.
These calculations are subjective in nature and involve uncertainties
and significant matters of judgment and do not include income tax
considerations. Therefore, the results cannot be determined with
precision and cannot be substantiated by comparison to independent
market values and may not be realized in actual sale or settlement of
the instruments. There may be inherent weaknesses in any calculation
technique, and changes in the underlying assumptions used could
significantly affect the results. The following table presents a
summary of the Company's financial instruments as of December 31,
1998:
1998
-----------------------
Carrying Estimated
Amount Fair Value
------ ----------
Financial Assets:
Cash and cash equivalents $ -- $ --
Marketable securities -- --
F-13
<PAGE>
HEALTHLINK INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
11. Fair Value of Financial Instruments (Continued)
----------------------------------------------
The carrying amounts for cash and cash equivalents, receivables,
accounts payable and accrued expenses approximate fair value because
of the short maturities of these instruments. The fair value of
marketable securities is determined by the most recently traded price
of each security at the balance sheet date.
12. Subsequent Events
-----------------
Issuance of Common Stock
------------------------
In March through July 1999, the Company issued 1,129,483 shares of
common stock in consideration for services valued at $.0029 to $.029
per share of common stock.
Stock Split
-----------
On October 28, 1999, the Company's shareholders adopted a resolution
approving a 2.90 for one reverse stock split of the issued and
outstanding common shares, effective October 28, 1999. All share
information and per share data have been retroactively restated for
all periods presented to reflect the stock split.
Financing Commitment
--------------------
In October 1999, Simba Financial, Incorporated, a company controlled
by the owner of Purchase Plus, provided the Company with a $500,000
line of credit to finance the Company's operating expenses and working
capital requirements. Amounts advanced under the line of credit will
bear interest at 10% per annum and are due on December 31, 2000.
F-14
<PAGE>
================================================================================
HEALTHLINK INTERNATIONAL, INC.
[GRAPHIC OMITTED]
Until , 1999 (25 days after the date of this prospectus), all dealers that
buy, sell or trade these securities, whether or not participating in this
offering, may be required to deliver a prospectus. This is in addition to the
dealers' obligation to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VII of the Registrant's bylaws provides as follows:
"ARTICLE VII INDEMNIFICATION
PURSUANT TO N.R.S. 78.751 any person who is a Director, Officer, Employee,
or Agent of this Corporation, who becomes a party to an action is entitled to
indemnification against expenses including attorney fees, judgments, fines and
amounts paid in settlement, if he acted in good faith and he reasoned his
conduct or action to be in the best interest of the Corporation."
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION (1)
SEC Registration Statement............................... $ 7,080
Blue Sky Filing Fees..................................... $ 10,000
Blue Sky Legal Fees...................................... $ 20,000
Printing Expenses........................................ $ 30,000
Legal Fees and Expenses.................................. $ 120,000
Accounting Fees.......................................... $ 45,000
Transfer Agent Fees...................................... $ 5,000
Miscellaneous Expenses................................... $ 62,920
---------
Total $ 300,000
=========
(1) All expenses, except the SEC registration fee and NASD filing fee, are
estimated.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
During the last three years, the Registrant sold the following securities
which were not registered under the Securities Act, as amended.
(i) In March 1999, the Registrant sold the following shares of its common stock
to the persons listed below for $.0029 per share:
II-1
<PAGE>
Name Number of Shares
---- ----------------
Golden Guardian Productions, Ltd. 182,759
Agape Family Trust 103,448
Harmony International, LLC 68,966
Janitye L. Vaile 172,414
Hubert T. McDonald, LLC 103,448
M.E.I.C. 75,862
Chris Beddoes 34,483
Ronald Beddoes 34,483
David Martin 34,483
Dan Beddoes 17,241
Alan Day 17,241
Don Fisher 17,241
Kevin Grandy 17,241
Ruthie Lewis 17,241
Lisa Navaratnam 17,241
Frank Valinho 17,241
Joe Valinho 17,241
Jim Williamson 17,241
Lynn Harrison 10,345
Elizabeth Blair 8,621
Amy Kish 8,621
William Lundberg 8,621
Becky Breedlove 6,897
Bill Fate 6,897
Patricia Morgan 6,897
Tanya St. John 6,897
Don Wright 6,897
(ii) Between April and July, 1999, the Registrant sold the following shares of
its common stock to the persons listed below for $.029 per share.
Kris TenEyck, LLC 29,310
Victor E. Vaile, IV, LLC 29,310
David Thomas, LLC 12,758
Charles Bruce 8,621
ETN, Inc. 6,897
Brenda Burns 3,448
Shelly Blake 2,931
(iii) In November 1999, the Registrant sold 300,000 shares to Nicholas G.
Venetis and 65,517 shares to Chris Beddoes for $.029 per share.
II-2
<PAGE>
With respect to the sales made, the Registrant relied on Section 4(2) of
the Securities Act of 1933, as amended (the "Securities Act"). No advertising or
general solicitation was employed in offering the securities. The securities
were offered to a limited number of persons all of whom were business associates
or personal friends of the Registrant or its stockholders, executive officers or
directors, and the transfer thereof was appropriately restricted by the
Registrant. All persons were capable of analyzing the merits and risks of their
investment,acknowledged in writing that they were acquiring the securities for
investment and not with a view toward distribution or resale and understood the
speculative nature of their investment.
ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Exhibit No. Title
- ----------- -----
1.01 Form of Selling Agreement (To be filed by Amendment)
1.02 Form Indication of Interest Card (To be filed by Amendment)
1.03 Form ofSubscription Agreement
3.01 Articles of Incorporation, as amended, of the Registrant
3.02 Bylaws of the Registrant
5.01 Opinion of Gary A. Agron regarding legality of the common stock
and warrants (includes consent)
10.01 Agreement with Longport, Inc.
10.02 Agreement with Purchase Plus Buyers Group, Inc.
10.03 Agreement with International MedCare, Inc.
10.05 Line of credit with Simba Financial Incorporated
10.06 Agreement with National Administrative Company, Inc.
10.07 Stock Option Plan
23.01 Consent of Gary A. Agron (included in Exhibit 5.01)
23.02 Consent of Angell & Deering
27.01 Financial Data Schedule
ITEM 28. UNDERTAKINGS.
The Registrant hereby undertakes:
(a) That insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant, 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 of 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.
II-3
<PAGE>
(b) That subject to the terms and conditions of Section 13(a) of the
Securities Exchange Act of 1934, it will file with the Securities and
Exchange Commission such supplementary and periodic information, documents
and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority
conferred in that section.
(c) That any post-effective amendment filed will comply with the
applicable forms, rules and regulations of the Commission in effect at the
time such post-effective amendment is filed.
(d) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) 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;
(iii) 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;
(e) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment 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.
(f) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the Offering.
(g) To provide at the closing of the offering certificates in such
denominations and registered in such names as required to permit prompt
delivery to each purchaser.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and has duly caused this registration
statement to be signed on its behalf by the undersigned, hereunto duly
authorized, in Westerville, Ohio, on November 12, 1999.
HEALTHLINK INTERNATIONAL, INC.
By: /s/ Nicholas G. Venetis
----------------------------------------
Nicholas G. Venetis, Chief Executive Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Nicholas G. Venetis, as his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intends and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, as amended, this
Registration Statement has been signed below by the following persons on the
dates indicated.
Signature Title Date
--------- ----- ----
/s/ Nicholas G. Venetis Chief Executive Officer, November 12, 1999
Nicholas G. Venetis President and Director
/s/ Cleone W. Armold Secretary and Director November 12, 1999
Cleone W. Armold
/s/ Donald M. Pedersen Chief Financial Officer November 12, 1999
Donald M. Pedersen (Principal Accounting
Officer) and Director
/s/ Paul D. Martin Director November 12, 1999
Paul D. Martin
Director _______________, 1999
Charles R. Bruce
II-5
<PAGE>
HEALTHLINK INTERNATIONAL, INC.
EXHIBIT INDEX
Exhibit No. Title
- ----------- -----
1.01 Form of Selling Agreement (To be filed by Amendment)
1.02 Form Indication of Interest Card (To be filed by Amendment)
1.03 Form ofSubscription Agreement
3.01 Articles of Incorporation, as amended, of the Registrant
3.02 Bylaws of the Registrant
5.01 Opinion of Gary A. Agron regarding legality of the common stock
and warrants (includes consent)
10.01 Agreement with Longport, Inc.
10.02 Agreement with Purchase Plus Buyers Group, Inc.
10.03 Agreement with International MedCare, Inc.
10.05 Line of credit with Simba Financial Incorporated
10.06 Agreement with National Administrative Company, Inc.
10.07 Stock Option Plan
23.01 Consent of Gary A. Agron (included in Exhibit 5.01)
23.02 Consent of Angell & Deering
27.01 Financial Data Schedule
Exhibit 1.03
SUBSCRIPTION AGREEMENT
HEALTHLINK INTERNATIONAL, INC.
929 Eastwind Drive, Suite 225
Westville, OH 43081
IN ORDER TO PURCHASE Units of HealthLink International, Inc. (the
"Company") as described in the Prospectus dated ______________, accompanying
this Subscription Agreement, each subscriber must complete, execute and return
this Subscription Agreement, along with the payment by check, payable to "Bank
One as HealthLink Escrow Agent" for the Units purchased, to the Company at 929
Eastwind Drive, Suite 225, Westville, OH 43081. Capitalized terms used herein
and not otherwise defined shall have the meaning ascribed thereto in the
Prospectus.
1. Subscription
The undersigned (the "Subscriber") hereby subscribes for and agrees to
purchase from the Company subject to the terms and conditions set forth in the
Prospectus dated ______________________ (the "Prospectus"), a copy of which
accompanied this Subscription Agreement, ____ Units of the Company's securities
at a price per Unit of $3.00 or $___________ in the aggregate (the "Subscription
Price").
2. Review
The Subscriber represents that Subscriber has carefully reviewed the
Company's Prospectus.
3. Payment
The Subscription Price must accompany this Subscription and shall be paid
by check payable to "Bank One as HealthLink Escrow Agent."
4. Subscription Information
If an individual:
-------------------------------- ------------------------
Full Name (type or print) Social Security Number
--------------------------------
Address
---------------------------------
City State Zip
---------------------------------
Telephone
HealthLink Subscription Agreement Page 1
<PAGE>
If a Corporation:
--------------------------------- ------------------------
Full Corporation Name (type or print) Tax ID Number
---------------------------------
Head Office Address
---------------------------------
City State Zip
---------------------------------
Telephone Number
5. Miscellaneous
(a) All pronouns and any variations thereof used herein shall be deemed to
refer to the masculine, feminine, impersonal, singular or plural, as the
identity of the person or persons may require.
(b) This Subscription Agreement constitutes the legal, valid and binding
obligation of the undersigned enforceable in accordance with its terms. This
Subscription Agreement shall be enforced, governed and construed in all respects
in accordance with the laws of the State of Nevada.
(c) This Subscription Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof and may be amended
only by writing executed by both parties hereto.
(d) Except as set forth herein, neither this Subscription Agreement nor any
provision hereof shall be waived, modified, changed, discharged, terminated,
revoked or canceled except by an instrument in writing signed by the party
effecting the same against whom any change, discharge or termination is sought.
(e) The Offering may be withdrawn at any time prior to the issuance of
Units to prospective Subscribers. Further, in connection with the offer and sale
of the Units, the Company reserves the right, in its sole discretion, to reject
any subscription in whole or in part or to allot to any prospective subscriber
fewer than the Units applied for by such subscriber. The Units are offered by
the Company subject to prior sale, acceptance or an offer to purchase,
withdrawal, cancellation or modification of the offer, without notice.
(f) This Subscription Agreement does not constitute an offer to sell or a
solicitation of any offer to buy any securities offered hereby by anyone in any
jurisdiction in which such offer or solicitation is not qualified to do so or to
anyone to whom it is unlawful to make such offer or solicitation.
HealthLink Subscription Agreement Page 2
<PAGE>
IN WITNESS WHEREOF, TH SUBSCRIBER HAS EXECUTED THIS SUBSCRIPTION
<TABLE>
<CAPTION>
<S> <C>
AGREEMENT ON THIS ____ DAY OF ___________, 2000.
---------------------------------------------
Accepted this ___ day of __________, 2000 Name of Subscriber (Please Type of Print)
---------------------------------------------
By:_______________________________ (Signature of Subscriber or of duly authorized
(Signature of duly authorized signatory) signatory of a corporation, partnership or
other subscriber that is not a natural person)
Name:________________________________________
Title: ______________________________________
Please print or type name and title of duly
authorized signatory of a corporate,
partnership that is not a natural person
</TABLE>
HealthLink Subscription Agreement Page 3
Exhibit 3.01
ARTICLES OF INCORPORATION
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
NOV 17 1994
17681-94
CHERYL A. LAU SECRETARY
OF STATE OF
COMMERCIAL BUILDING SYSTEMS, INC.
Know all men by these presents;
That we the undersigned, have this day voluntarily associated ourselves together
for the purpose of forming a corporation under and pursuant to the provisions of
Nevada Revised Statutes 78.010 To Nevada Revised Statutes 78.090 inclusive, as
amended, and certify that;
ARTICLE I
The name of this corporation is Commercial Building Systems, Inc.
the name and post office address of the incorporator signing the Articles of
Incorporation is: Richard D. Fritzler 1800 E. Sahara Suite 107 Las Vegas,
Nevada 89104. file name and address of the first member of the First
Board of Directors is: Richard 1). Fritzler 1800 E. Sahara Suite 107 Las
Vegas, Nevada 89104.
ARTICLE II
The Resident Agent of this corporation in Nevada shall be Nevada Corporate
Services located at 1800 E. Sahara, Suite 107, Las Vegas, Clark County, Nevada,
89104. Offices for the transaction of any business of the Corporation, and where
meetings of the Board of Directors and of Stockholders may be held, may be
established and maintained in any other part of the State of Nevada, or in any
other state, territory or possession of the United States of America, or in any
foreign country as the Board of Directors may, from time to time determine.
<PAGE>
ARTICLE III
The nature of the business and the objects and purpose proposed to be
transacted, promoted or carried on by the Corporation is to conduct any lawful
activity in accordance with the Laws of the State of Nevada and the United
States of America, including but not limited to the following;
1) Shall have the rights privileges and powers as may be conferred upon a
corporation by any existing law.
2) May at any time exercise such rights, privileges and powers, when not
inconsistent with the purposes and objects for which this corporation is
organized.
3) This corporation shall have perpetual existence.
4) To sue or be sued in any Court of Law.
5) To make contracts.
6) To hold, purchase and convey real and personal estate and to mortgage or
lease any such real and personal estate with its franchises. The power to hold
real and personal estate shall include the power to take the same by device or
bequest in this state, or in any other state, territory or country.
7) To appoint such officers and agents as the affairs of the Corporation
shall require, and to allow them suitable compensation.
8) To make By-Laws not inconsistent with the Constitution or Laws of the
United States, or of the State of Nevada, for the management, regulation and
government of its affairs and property, the transfer of its stock, the
transaction of its business, and the calling and holding of meetings of its
Stockholders.
9) To wind tip and dissolve itself, or be wound up and dissolved, according
to existing law.
2
<PAGE>
10) To adopt or use a common seal or stamp, and alter tile same at
pleasure. The use of a seal or stamp by the Corporation on any corporate
document is not necessary. The Corporation may use a seal or stamp if it
desires, but such use or nonuse shall not in any way affect the legality of the
document.
11) To borrow money and contract debts when necessary for the transaction
of its business, or for the exercise of its corporate rights, privileges or
franchises, or for any other lawful purpose of its incorporation; to issue
bonds, promissory notes, bills of exchange, debentures, and other obligations
and evidences of indebtedness, payable at a specific time or times, or payable
upon the happening of a specified event or events, whether secured by mortgage,
pledge or other security, or unsecured, for money borrowed, or in payment for
property purchased, or acquired, or for any other lawful object.
12) To guarantee, purchase, hold, take, obtain, receive, subscribe for, ow
ii, use, dispose of, sell, exchange, lease, lend, assign, mortgage, pledge, or
otherwise acquire, transfer or deal in or with bonds or obligations of, or
shares, securities or interests in or issued by, any person, government,
governmental agency or political subdivision of government, and to exercise all
the rights, powers and privileges of ownership of such an interest, including
the right to vote, if any.
13) To purchase, hold, sell and transfer shares of its own capital stock,
and use therefor its capital, capital surplus, surplus, or other property or
funds.
14) To conduct business, have one or more offices, and hold, purchase,
mortgage and convey real and personal property in this state, and in any of the
several states, territories, possessions and dependencies of the United States,
the District of Columbia, and any foreign countries.
3
<PAGE>
15) To do everything necessary and proper for the accomplishment of the
objects enumerated in its Articles of Incorporation, or in any amendment thereof
or necessary or incidental to the protection and benefit of the Corporation,
and, in general, to carry on any lawful business necessary or incidental to the
attainment of the objects of the Corporation, whether or not the business is
similar in nature to the objects set forth in the Articles of Incorporation, or
in any amendment thereof.
16) To make donations for public welfare or for charitable, scientific or
educational purposes.
17) To enter into partnerships, general or limited, or joint ventures, in
connection with any lawful activities.
ARTICLE IV
Thee capital stock of this corporation shall consist of twenty-five thousand
shares of common stock (25,000), without nominal or par value, all of which
stock shall be entitled to voting power. The Corporation may issue the shares of
stock for such consideration as may be fixed by the Board of Directors.
ARTICLE V
The members of the governing board of this corporation shall be styled
directors. The Board of Directors shall consist of at least one (1) person. The
number of directors of this corporation may, from time to time, be increased
or decreased by an amendment to the By-Laws in that regard and without the
necessity of amending the Articles of Incorporation. A majority of the Directors
in office, present at any meeting of the Board of Directors, duly called,
whether regular or special, shall always constitute a quorum for the transaction
of business, unless the By-Laws otherwise provide.
4
<PAGE>
ARTICLE VI
This corporation shall have a president, a secretary, a treasurer, and a
resident agent, to be chosen by the Board of Directors, any person may hold two
or more offices.
ARTICLE VII
The resident agent of this corporation shall be Nevada Corporate Services, the
registered office address of this corporation in the State of Nevada, shall be
1800 E. Sahara Suite 107, Las Vegas, Nevada 89104.
ARTICLE VIII
The capital stock of the Corporation, after the fixed consideration thereof has
been paid or performed, shall not be subject to assessment, and the individual
Stockholders of this corporation shall not be individually liable for the debts
and liabilities of the Corporation, and the Articles of Incorporation shall
never be amended as to the aforesaid provisions.
ARTICLE IX
The Board of Directors is expressly authorized: (subject to the By-Laws, if any,
adopted by the Stockholders)
1) To make, alter or amend the By-Laws of the Corporation.
2) To fix the amount in cash or otherwise, to be reserved as working
capital.
3) To authorize and cause to be executed mortgages and liens upon the
property and franchises of the Corporation.
5
<PAGE>
4) To by resolution or resolutions passed by a majority of the whole board,
designate one or more committees, each committee to consist of one or more of
the Directors of the Corporation, which, to the extent provided in the
resolution or resolutions or in the By-Laws of the Corporation, shall have and
may exercise the powers 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 on which the Corporation
desires to place a seal. Such committee or committees shall have such name or
names as may be stated in the ByLaws of the Corporation or as may be determined
from time to time by resolution adopted by the Board of Directors.
5) To sell, lease or exchange all of its property and assets, including its
goodwill and its corporate franchises, upon such terms and conditions as the
board deems expedient and for the best interests of the Corporation, when and
as authorized by the affirmative vote of the Stockholders holding stock in the
Corporation entitling them to exercise at least a majority of the voting power
given at a Stockholders meeting called for that purpose.
ARTICLE X
The Directors of this corporation need not be Stockholders.
6
<PAGE>
ARTICLE XI
In the absence of fraud, no contract or other transaction of the Corporation
shall be affected by the fact that any of tile Directors are in any way
interested in, or connected with, any other party to such contract or
transaction, or are themselves, parties to such contract or transaction,
provided that this interest in any such contract or transaction of any such
director shall at any time be fully disclosed or otherwise known to the Board
of Directors, and each and every person who may become a director of the
Corporation is hereby relieved of any liability that might otherwise exist from
contracting with the Corporation for the benefit of himself or any firm,
association or corporation in which he may be in any way interested.
ARTICLE XII
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 involving any act or omission of any such director or
officer provided, however, that the foregoing provision shall not eliminate or
limit the liability of a director or officer for acts or omissions which involve
intentional misconduct, fraud or a knowing violation of law, or the payment of
dividends in violation of Section 78.300 of the Nevada Revised Statutes. Any
repeal or modification of this Article by the Stockholders of the 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.
7
<PAGE>
ARTICLE XIII
Except to the extent limited or denied by Nevada Revised Statutes 78.265
Shareholders shall have no preemptive right to acquire unissued shares, treasury
shares or securities convertible into such shares, of this corporation.
I, the undersigned, being the incorporator hereinbefore named for the purpose
of forming a corporation pursuant to the general corporation law of the State of
Nevada, do make and file these Articles of Incorporation, hereby declaring and
certifying that the facts herein stated are true, and accordingly have hereunto
set my hand.
/s/ Richard Fritzler
-----------------------------------
State of Nevada )
)ss
Clark County )
On November 16, 1994 personally appeared before me, the undersigned, a Notary
Public, Richard Fritzler, known to me the person whose name is subscribed to
the foregoing document and acknowledged to me that he executed the same.
/s/ Earl P. Gripentrog
---------------------------------
Notary Public
8
NOTARY PUBLIC
County of Clark-State of Nevada
EARL P. GRIPENTROG
My Appointment Expires May 23, 1995
<PAGE>
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
NOV 17 1994
CHERYL A. LAU SECRETARY
OF STATE
CERTIFICATE OF ACCEPTANCE OF APPOINTMENT
BY RESIDENT AGENT
In the matter of Commercial Building Systems, Inc.
1 Nevada Corporate Services, with address at:
1800 East Sahara Suite 107, City of Las Vegas, County of Clark, State of Nevada,
hereby accept appointment as Resident Agent of the above-entitled corporation in
accordance with NRS 78.090.
FURTHERMORE, that the principal office in this State is located at 1800
East Sahara suite 107, City of Las Vegas, County of Clark, State of Nevada,
IN WITNESS WHEREOF, I have hereunto set my hand November 16, 1994.
/s/ Richard Fritzler
-------------------------------------
For Nevada Corporate Services
RESIDENT AGENT
State of Nevada )
)ss
Clark County )
On November 16, 1994 personally appeared before me, the undersigned, a Notary
Public, Richard Fritzler, known to me the person whose name is subscribed to the
foregoing document and acknowledged to me that he executed the same.
/s/ Earl P. Gripentrog
------------------------
Notary Public
NOTARY PUBLIC
County of Clark-State of Nevada
EARL P. GRIPENTROG
My Appointment Expires May 23, 1995
NRS 78.090 Except during any period of vacancy described in NRS 78.097,
every corporation shall have a resident agent, who may be either a natural
person or a corporation, resident or located in this state, in charge of its
principal office. The resident agent may be any bank or banking corporation,
or other corporation, located and doing business in this state...The certificate
of acceptance must be filed at the time of the initial filing of the corporate
papers.
2
<PAGE>
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
Filed #C17681-94
Mar 26, 1999
IN THE OFFICE OF
Dean Heller
DEAN HELLER SECRETARY
OF STATE
Commercial Building Systems, Inc.
---------------------------------
Name of Corporation
the undersigned Gene Armold and
-----------------------------------------------------------
Gene Armold of Commercial Building Systems, Inc.
- -------------------------------- -------------------------------------
Secretary or Assistant Secretary Name of Corporation
do hereby certify:
That the Board of Directors of said corporation at a meeting duly convened,
held on the 10th day of March, adopted a resolution to amend the original
articles as follows:
Article I. is hereby amended to read as follows:
The name of the corporation is amended to HealthLink International, Inc.
Article IV is hereby amended to read as follows:
The capital stock of this corporation is amended to 100 million shares at
$.Q01 par value and 1 million shares preferred at nopar value.
The number of shares of the corporation outstanding and entitled to vote on an
amendment to the Articles of Incorporation is 900; that the said change(s) and
amendment have been consented to and approved by a majority vote of the
stockholders holding at least a majority of each class of stock outstanding and
entitled to vote thereon.
/s/ Gene Arnold
--------------------------------------------
President or Vice President
/s/ Gene Arnold
--------------------------------------------
Secretary or Assistant Secretary
State of Ohio )
) ss.
County of Delaware )
On March 24-1999, personally appeared before me, a Notary Public, Gene
Arnold, who acknowledged that they executed the above instrument.
/s/ Sandra L. LeCrone
--------------------------------------
Signature of Notify
(NOTARY STAMP OR SEAL)
Sandra L. LeCrone
Notary Public - State of Ohio
My Commission Expires
August 12, 2001
Exhibit 3.02
BYLAWS OF
COMMERCIAL BUILDING SYSTEMS, INC.
A NEVADA CORPORATION
ARTICLE I STOCKHOLDER'S MEETINGS
A) ANNUAL MEETINGS shall be held on or before the 1st day of November of
each year beginning 1995, or at such other time as may be determined by the
board of directors or the president, for the purposes of electing directors, and
transacting such other business as may properly come before the meeting.
B) SPECIAL MEETINGS may be called at any time by the Board of Directors or
by the President, and shall be called by the President or the Secretary at the
written request of the holders of a majority of the shares then outstanding and
entitled to vote.
C) WRITTEN NOTICE stating the time and place of the meeting, signed by the
President or the Secretary, shall be served either personally or by mail, not
less than ten (10) nor more than sixty (60) days before the meeting upon each
Stockholder entitled to vote. Said notice shall state the purpose for which the
meeting is called, no other business may be transacted at said meeting, unless
by unanimous consent of all Stockholders present, either in person or by proxy.
D) PLACE of all meetings shall be at the principal office of the
Corporation, or at such other place as the Board of Directors or the President
may designate.
2
<PAGE>
E) A QUORUM necessary for the transaction of business at a Stockholder's
meeting shall be a majority of the stock issued and outstanding, either in
person or by proxy. If a quorum is not present, the Stockholders present may
adjourn to a future time, and notice of the future time must be served as
provided in Article I, C), if a quorum is present they may adjourn from day to
day, without notice.
F) VOTING: Each stockholder shall have one vote for each share of stock
registered in his name on the books of the Corporation, a majority vote shall
authorize any Corporate action, except the election of the Directors, who shall
be elected by a plurality of the votes cast.
G) CONSENT: Any action, except election of Directors, which may be taken by
a vote of stockholders at a meeting, may be taken without a meeting if
authorized by a written consent of shareholders holding at least a majority of
the voting power.
ARTICLE II BOARD OF DIRECTORS
A) OFFICE: At least one person chosen annually by the stockholders shall
constitute the Board of Directors. Additional Directors may be appointed by the
Board of Directors. The Director's term shall be for one year, and Directors may
be re-elected for successive annual terms.
B) DUTIES: The Board of Directors shall be responsible for the control and
management of the affairs, property and interests of the Corporation and may
exercise all powers of the Corporation, except as are in the Articles of
Incorporation or by statute expressly conferred upon or reserved to the
stockholders.
3
<PAGE>
C) MEETINGS: Regular meetings of the Board of Directors shall be held
immediately following the annual meeting of the stockholders, at the place of
the annual meeting of the stockholders, or at such other time and place as the
Board of Directors shall by resolution establish. Notice of any regular meeting
shall not be required, unless the Board of Directors shall change the time or
place of the regular meeting, notice must be given to each Director who was not
present at the meeting at which change was made. Special meetings may be called
by the President or by one of the Directors at such time and place specified in
the notice or waiver of notice thereof. The notice of special meeting shall be
mailed to each Director at least five (5) days before the meeting day, or if the
notice is delivered personally, by telegram or telephone then the notice must be
delivered the day before the meeting. Special meetings may be called without
notice, provided a written waiver of notice is executed by a majority of the
Board of Directors.
D) CHAIRMAN: At all meetings of the Board of Directors, the Chairman shall
preside. If there is no Chairman one shall be chosen by the Directors.
E) QUORUM: A majority of the Board of Directors shall constitute a quorum.
F) VACANCIES: Any vacancy in the Board of Directors, unless the vacancy was
caused by stockholder removal of a Director, shall be filled for the unexpired
term by a majority vote of the remaining Directors, though less than a quorum,
at any regular or special meeting of the Board of Directors called for that
purpose.
4
<PAGE>
G) A RESOLUTION in writing signed by a majority of the Board of Directors,
shall constitute action by the Board, with the same force and effect as though
such resolution had been passed at a duly convened meeting. The Secretary shall
record each resolution in the minute book.
H) COMMITTEES may be appointed by a majority of the Board of Directors from
its number, by resolution, with such powers and authority to manage the business
as granted by the resolution.
I) SALARIES of the Corporate Officers shall be determined by the Board of
Directors.
ARTICLE III OFFICERS
A) TITLE: This Corporation shall have a president, secretary, treasurer,
and such other officers as may be necessary. Any two or more offices may be held
by the same person. The officers shall be appointed by the Board of Directors at
the regular annual meeting of the Board.
B) DUTIES:
THE PRESIDENT SHALL:
1) Be the chief executive officer of the Corporation.
2) Preside at all meetings of the Directors and the Stockholders.
3) Sign or countersign all certificates, contracts and other
instruments of the Corporation as authorized by the Board of
Directors and shall perform all such other incidental duties.
THE SECRETARY SHALL:
1) have charge of the corporate books, responsible to make the necessary
reports to the Stockholders and the Board of Directors.
2) prepare and disseminate notices, waivers, consents, proxies and other
material necessary for all meetings.
5
<PAGE>
3) file the sixty (60) day list of officers, directors, name of the
resident agent and the filing fee to the Secretary of State.
4) file the designation of resident agent in the office of the County Clerk
in which the principal office of the Corporation in Nevada is located.
5) file the annual list of officers, directors and designation of
resident agent along with the filing fee.
6) be the custodian of the certified articles of incorporation, bylaws and
amendments thereto.
7) supply to the Resident Agent or Principal Corporate Nevada Office the
name of the custodian of the stock ledger or duplicate stock ledger, along
with the complete Post Office address of the custodian, where such stock
ledger or duplicate stock ledger is kept.
THE TREASURER SHALL:
1) Have the custody of all monies and securities of the Corporation and
shall keep regular books of account.
2) Perform all duties incidental to his office as directed of him by the
Board of Directors and the President.
ARTICLE IV STOCK
A) The certificates representing shares of the Corporation's stock shall be
in such form as shall be adopted by the Board of Directors, numbered and
registered in the order issued. The certificates shall bear the following; the
holders name, the number of shares of stock, the signature either of the
Chairman of the Board of Directors or the President, and either the Secretary or
Treasurer.
B) No certificate shall be issued until the full amount of consideration
has been paid, except as otherwise provided by law.
6
<PAGE>
C) Each share of stock shall entitle the holder to one vote.
ARTICLE V DIVIDENDS
DIVIDENDS may be declared and paid out of any funds available therefor, as
often, in such amounts as the Board of Directors may determine, except as
limited by law.
ARTICLE VI FISCAL YEAR
THE FISCAL YEAR of the Corporation shall be determined by the Board of
Directors.
ARTICLE VII INDEMNIFICATION
PURSUANT TO N.R.S. 78.751 any person who is a Director, Officer, Employee, or
Agent of this Corporation, who becomes a party to an action is entitled to
indemnification against expenses including attorney fees, judgments, fines and
amounts paid in settlement, if he acted in good faith and he reasoned his
conduct or action to be in the best interest of the Corporation.
ARTICLE VIII AMENDMENTS
A) STOCKHOLDERS shall have the authority to amend or repeal all the bylaws
of the Corporation and enact new bylaws, by affirmative vote of the majority of
the outstanding shares of stock entitled to vote.
B) THE BOARD OF DIRECTORS shall have the authority to amend, repeal, or
adopt new bylaws of the Corporation, but shall not alter or repeal any bylaws
adopted by the stockholders of the Corporation.
7
Exhibit 5.01
Registration Statement for Form SB-2
EXHIBIT 5.01
November 12, 1999
HealthLink International, Inc.
929 Eastwind Drive, Suite 225
Westerville, Ohio 43081
Re:Registration Statement on Form SB-2
Ladies and Gentlemen:
We are counsel for HealthLink International, Inc., a Nevada corporation
(the "Company") in connection with its proposed public offering under the
Securities Act of 1933, as amended, of up to 3,000,000 Units of its securities,
each Unit consisting of one share of $.001 par value common stock ("Common
Stock") and one common stock purchase warrant ("Warrant") through a Registration
Statement on Form SB-2 ("Registration Statement") as to which this opinion is a
part, to be filed with the Securities and Exchange Commission (the
"Commission").
In connection with rendering our opinion as set forth below, we have
reviewed and examined originals or copies identified to our satisfaction of the
following:
(1) Articles of Incorporation, and amendment thereto, of the Company as
filed with the Secretary of State of the State of Nevada.
(2) Corporate minutes containing the written deliberations and resolutions
of the Board of Directors and shareholders of the Company.
(3) The Registration Statement and the Preliminary Prospectus contained
within the Registration Statement.
(4) The other exhibits to the Registration Statement.
We have examined such other documents and records, instruments and
certificates of public officials, officers and representatives of the Company,
and have made such other investigations as we have deemed necessary or
appropriate under the circumstances.
Based upon the foregoing and in reliance thereon, it is our opinion that
the Units, Common Stock, Warrants and Common Stock issuable upon exercise of the
Warrants offered under the Registration Statement will, upon the purchase,
receipt of full payment, issuance and delivery in accordance with the terms of
the offering described in the Registration Statement, be fully and validly
authorized, legally issued fully paid and non-assessable.
<PAGE>
We hereby consent to the use of this opinion, as an exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Prospectus constituting a part thereof.
Very truly yours,
Gary A. Agron
Exhibit 10.01
TECHNOLOGY ENHANCEMENT AND MARKETING CONTRACT
This Technology Enhancement and Marketing Contract (hereinafter Agreement) is
entered into as of the 1st day of June, 1999 by and between HealthLink
International Inc. (hereinafter HLI) whose address is 140 Dorchester Square,
Suite B, Westerville, Ohio 43081, and Longport, Incorporated (hereinafter LPT1)
whose address is 791 5. Chester Road, Swarthmore, Pennsylvania 19081, who shall
be known as the parties to this Agreement.
WHEREAS, the parties desire to enter into this Agreement whereby HLI will
provide Five Million Dollars over the next five years to fund research for bio-
medical technology enhancements to and for Longport's digital scanner
technologies, and LPTI agrees to provide and oversee the development of these
technology enhancements, and
WHEREAS, LPTI and HLI agree to share in the proceeds from the sale and/or lease
of all enhancements and new applications of the Longport Digital Scanner
developed as a result of the research funded by HLI, as well as the sale and/or
lease of the Longport Digital Scanner in its existing form by HLI personnel
and/or associated entities, and
WHEREAS, the parties hereby state that they will cooperate in other matters
including, but not limited to, the marketing of current Longport Digital Scanner
technologies both domestically and internationally, and the joint review and
funding of other technologies created by third parties,
NOW THEREFORE, in consideration of the foregoing, the parties agree as follows:
1. HLI shall provide the Five Million Dollars in increments of $30,000.00 a
month for the first year, $60,000.00 a month for the second year, $120,000.00 a
month for the third and fourth years and $100,000.00 a month for the fifth year
until a total of Five Million Dollars is expended.
2. HLI payments in accordance with Paragraph 1 above shall begin effective June
1, 1999.
3. HLI has provided $50,000.00 to LPTI as an initial deposit, $30,000.00 of
which shall be applied to the June 1, 1999 payment, and $20,000.00 of which
shall be applied to the July 1, 1999 payment.
4. LPTI and HLI shall share in the proceeds from the sale and/or lease of all
enhancements and new applications of the Longport Digital Scanner developed as a
result of the research funded by HLI pursuant to this Agreement with HLI
receiving from LPTI ten percent of the gross revenues from
1
<PAGE>
the sale and/or lease of the enhancements and new applications of the Longport
Digital Scanner developed as a result of the research funded by HLI pursuant to
this Agreement for a period of ten years.
5. HLI will submit any literature that HLI creates which mentions the Longport
Digital Scanner to LPTI for approval prior to publication by HLI.
6. HLI shall have the exclusive right to market a veterinary card to consumers,
which card shall be associated with the use of the Longport Digital Scanner by
veterinarians, and HLI shall have the non-exclusive right to market the Longport
Digital Scanner to veterinarians.
7. LPTI will give HLI the opportunity to finance up to fifty percent of the
Longport Digital Scanners produced, and for each Longport Digital Scanner so
financed by HLI, LPTI and HLI will share equally in the lease income of
$2,000.00 per month.
8. This Agreement can be terminated by LPTI if HLI shall fail to make any
required payment within thirty-one (31) days of the due date (the 1st business
day of each month unless specifically stated otherwise in writing) or shall
knowingly misrepresent the effectiveness of the LDS Scanner or the relationship
between LPTI and HLI. HLI will be granted an opportunity to cure any pending
default to the satisfaction of LPTI within thirty days of any notification of
said pending default.
9. This Agreement can at the option of HLI be terminated by HLI if LPTI shall
fail to use the funds provided for the development of bio-medical technology
enhancements of the Longport Digital Scanner. LPTI will be granted an
opportunity to cure any pending default to the satisfaction of HLI within
thirty days of any notification of said pending default.
10. LPTI will provide an accounting monthly to HLI outlining the use of the
funds provided by HLI to LPTI pursuant to Paragraph 1 of this agreement.
11. Both parties agree that all disputes shall be resolved by binding
arbitration using the services of the American Arbitration Association, in
Philadelphia, Pennsylvania.
12. This Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania.
13. If a court of competent jurisdiction shall determine that any of the terms
of this Agreement are unenforceable, the remaining terms shall continue in full
force and effect.
2
<PAGE>
14. This Agreement shall be binding on the parties, their heirs, assignees
and/or successors in interest.
IN WITNESS WHEREOF, the parties have set their hands and seals, intending to be
legally bound hereby.
For: Longport, Incorporated:
/s/ James R. McGonigle
- ---------------------------------
James R. McGonigle, CEO
/s/ William B. Mullin
- ---------------------------------
William B. Mullin, President
For: HealthLink International, Inc.:
/s/ Hubert T. McDonald
- -------------------------------------
Hubert T. McDonald, CEO
/s/ Gene Armold
- -------------------------------------
Gene Armold, President
3
Exhibit 10.02
THIS AGREEMENT is made on this lst day of July 1999, between Purchase Plus
Buyers Group, (hereinafter PPBG) Buyer, an Ohio corporation and HealthLink
International (hereinafter HLI), Seller, a Nevada corporation qualified to do
business in the state of Ohio.
RECITALS
--------
WHEREAS, PPBG, the Buyer desires to acquire the right to have health care
benefits provided by the HLI, the Seller to its representatives at the price and
under terms and conditions specified below
WHEREAS, PPBG, the Buyer desires to acquire the right to redesignate (private
label) ULI products and services as its own and to further market these same
products and services to its consumers throughout North America.
WHEREAS, ULI, the Seller desires to acquire the right to use the discounted
products and services of PPBG, the Buyer, as a benefit under their discounted
consumer products division.
CONSIDERATION
-------------
THEREFORE, in consideration of the mutual promises and agreements expressed in
this instrument, the Parties agree to be bound by the terms of this document
PENCUNIARY CONSIDERATION
------------------------
THEREFORE, in consideration for the exchange of products and services PPBG, the
Buyer, shall remit the sum of $32.35 per year for each and every individual that
shall choose to become enrolled and avail themselves of the rights and benefits
of membership.
CONDITIONS
----------
Condition Precedent
The rights and obligations of the Parties are expressly made subject to the
followin8 condition precedent: the Seller must first contract for and obtain the
rights to both the services and provider base required by PPBG.
Condition Subsequent
In the event HLI shall fail to successfully negotiate for the services and
providers required by PPBG this contract and all rights granted under this
contract will terminate.
(This paragraph continues on the next page.)
1
<PAGE>
Condition of Satisfaction
The obligation of the buyer to provide consideration in conditioned on the
delivery of health care benefits by HLI. The Seller shall have sole right to
determine whether such delivery is satisfactory to their subjective standards,
regardless of objective standards or the opinion of others.
INDEMNIFICATION
---------------
PPBG, the Buyer agrees to indemnify HLI, the Seller for all losses incurred on
account of any injury, damage or pecuniary deficit which arises as a result of
the acts or omissions of PPBG, its agents or employees in the performance of
this contract.
HLI, the Seller agrees to indemnify PPBG, the Buyer for all losses incurred on
account of any injury, damage or pecuniary deficit which arises as a result of
the acts or omissions of HLI, its agents or employees in the performance of
this contract.
EXCULPATORY CLAUSE
------------------
PPBG agrees to hold HLI harmless for losses incurred on account of any injury to
person or damage to property sustained as a result of the acts and omissions,
including the negligent acts and omissions, of HLI or their agents or employees
in the performance of this contract.
HLI agrees to hold PPBG harmless for losses incurred on account of any injury to
person or damage to property sustained as a result of the acts and omissions,
including the negligent acts and omissions, of PPBG or their agents or employees
in performance of this contract
FOURCE MAJEURE CLAUSE
---------------------
If HLI is prevented from completing performance of any or all of its obligations
under this Agreement by an act of God or any other occurrence beyond its
control, then it will be excused from further performance on notice to PPBG
stating the reason for the nonperformance.
The parties understand that performance by HLI may be interrupted or delayed by
an occurrence outside of its control, including but not limited to the
following: an act of God, war, riot, sovereign conduct, or conduct of third
parties. If that should occur, HLI
(This paragraph continues on the next page)
2
<PAGE>
will he excused from performance for as long as it is reasonably necessary to
complete performance. In case of any dispute as to the parties will submit the
matter to arbitration.
TERMINATION
-----------
The term of this agreement shall be 2 years with automatic renewal
Either party may terminate this agreement by the giving of 30 days written
notice to the other party.
ARBITRATION CLAUSE
------------------
Any controversy or claim arising out of or relating to this contract, or breach
thereof, will be settled by arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association, and judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof.
ATTORNEY'S FEES
---------------
No attorneys fees shall be awarded as a result of litigation stemming from this
contract except that the prevailing party shall have the right to recover from
its adversary party the reasonable cost associated with the support of such
litigation.
INTEGRATION of AGREEMENT
------------------------
This agreement supersedes any prior written or oral agreements between the
regarding the subject matter of the agreement, and contains all covenants and
agreements between the parties with respect to that subject matter. Each party
to this agreement acknowledges that no representations, inducements, promises,
or agreements orally or written, have been made by any party, or anyone acting
on behalf of any party, other than those embodied in this agreement, and no
other agreement, and that no other agreement, statement, or promise not
contained in this agreement will be valid or binding.
ENTIRETY and SEVERABILITY PROVISIONS
------------------------------------
This agreement is indivisible as to all of the performances to be rendered under
it Breach of any obligation to be performed by PPBG constitutes a breach of the
entire agreement and will give HLI the right to terminate this agreement, a
breach by HLI shall confer reciprocal rights on PPBG.
3
<PAGE>
CHOICE of LAW CLAUSE
--------------------
This agreement will be governed by and construed in accordance with the laws of
the State of Ohio.
EFFECTS of CAPTIONS
-------------------
Captions of this section are for convenience and reference only and the words
contained must not be held to modify, amplify, or aid in the interpretation of
the provisions of this agreement.
ASSIGNABILITY CLAUSES
---------------------
This agreement may not be assigned in part or in whole except as an entire
transfer in sale or as a result of the joint written agreement of both PPBG and
of FILL. The consent to a mutually agreed upon transfer will not be unreasonably
withheld.
NOTICE PROVISIONS
-----------------
Any notice to be given under this agreement by either party to the other must be
in writing and may be effected by personal delivery, registered or certified
mail, return receipt requested.
EXECUTION BLOCK
---------------
Executed on July 1,1999 at Westerville Ohio
Purchase Plus Buyers Group Inc. HealthLink International Inc.
By By
Gene Armold, Hugh McDonald,
President CEO
4
Exhibit 10.05
Line of Credit
HealthLink International, Inc. ("HealthLink"), is opening a Line of Credit
("Line") with Simba Financial Incorporated ("Smiba") and agrees to the
following terms and conditions:
Line of Credit. This line of credit is an open-ended line of credit, which
HealthLink may use to obtain cash advances ("Advances") from time to time until
the maturity date of December 31,2000. Simba may at its discretion extend the
matunty date.
The initial credit line to HealthLink is $500,000 ("Credit Line"). Simba may at
its discretion increase the Credit Line to HealthLink upon review from Simba.
Advances. All checks written by Simba at the request of HealthLink will be
charged against the Line. Simba will have no obligation to honor any advance if
the resulting new balance of the Line would exceed the Credit Line; or after the
December 31,2000; or in the event of termination or suspension of the Credit
Line under the conditions described in this agreement.
Finance Charge. Advances are subject to finance charges from the date of
transaction, to the date payment is posted to the Line. The finance charge is
.8333% per month, which corresponds to an annual percentage rate of 10%.
Payments. All payments on this Line shall be applied first in payment of accrued
interest and any remainder in payment of principal. All principal and interest
is due by the maturity date of December 31, 2000.
Termination of Line. Simba can terminate the Line and require HealthLink to pay
the entire outstanding balance in one payment if:
o HealthLink engages in a fraud or material misrepresentation in
connection with the Line.
o HealthLink does not meet the repayment terms of this agreement.
If Simba terminates the Line and requires immediate payment of the entire
outstanding balance. HealthLink agrees to pay Simba finance charges on the
remaining balance on the Line at a rate of 25% per annum. Simba shall be
entitled to reasonable court costs and attorneys' fees for independent counsel
that Simba hires. Interest after termination, whether prior to or after ju4gmcnt
by a court of competent jurisdiction, shall accrue upon the outstanding unpaid
balance until such balance is paid in full.
Suspension or Reduction of Credit Line. Simba can refuse to make additional
extensions of credit or reduce the Line if:
o Simba reasonably believes HealthLink will not be able to meet the
repayment requirements due to a material change in HealthLink's
financial circumstances.
o HealthLink is in default of a material obligation under this Agreement
<PAGE>
Simba will give HealthLink written notice of any such action and conditions for
reinstating the credit privileges. Simba may reinstate HealthLink's credit
privileges when the conditions leading to suspension are cured to Simba's
satisfaction. An additional title examination and other documentation may be
required to reinstate HealthLink's Line, and any costs associated with
reinstatement will be borne by HealthLink, where permitted by law.
Other Provisions. HealthLink shall promptly notify Simba of any change in
circumstances that has a substantial adverse effect of HealthLink's credit
HealthLink will furnish Simba with financial statements as Simba may request
from time to time.
HealthLink's rights in this Line may not be assigned.
All of Simba' s rights under this agreement are valid to the extent permitted by
applicable law. If it is determined for any reason that any part of this
Agreement is invalid or unenforceable, this shall not affect the validity or the
enforcement of any other provision, and this Agreement will then read as if the
invalid or unenforceable part were not there.
Simba may delay exercising any of its rights without loosing them.
This Agreement and HealthLink's use of the Line shall be governed and construed
in accordance with federal law and the laws of Ohio, without regard to conflict
of law rules.
Agreed to on this ____ day of ________________________________________ ,1999.
Simba Financial Incorporated HealthLink International, Inc.
By:___________________ By:__________________________
Title ________________ Title________________________
Exhibit 10.06
AGREEMENT
This Agreement, effective November 1, 1999 is entered into by and between
Healthlink international, Inc., and National Administration Company, Inc.
(hereinafter referred to as NAC) for the purpose of establishing a relationship
under which Healthlink International, Inc., will market their discount card
program and NAC will provide certain administration duties and benefits as set
forth in this Agreement.
WHEREAS, Healthlink International, Inc. wishes to market discount cards to
members; and
WHEREAS, NAC has relationships with reputable vendors of the various discount
programs to be offered in connection with the discount card
NOW THEREFORE, the parties hereto agree as follows:
I. Duties of NAC
----------------
NAC agrees to perform the following functions under this Agreement.
A. To receive membership information in a computerized database for
benefits provided by NAC.
<PAGE>
B. To notify all the providers of the names and addresses of current
members and remit to the providers their fee for the benefits offered
to the members,
C. To provide a toll-free number for general questions of the members
staffed by experienced representatives.
D. To provide the benefits as listed in Exhibit 1 through vendors, NAC
shall be responsible for selecting each vendor utilized in connection
with the discount card program and shall be responsible for ensuring
that each vendor provides its respective benefits in accordance with
the terms and conditions of the discount card program. NAC shall
provide Healthlink International, Inc., with immediate written
notice of any changes being made to the benefits by any vendor. If the
vendor proposes a change in its benefit(s) and Healthlink
International, Inc. does not approve such change, NAC will use its
best efforts in obtaining a replacement vendor suitable to Healthlink
International, Inc. If the vendor or its replacement changes the
price, this increase may be passed on to Healthlink International.
Inc. at Healthlink International. Inc.'s. consent. Notwithstanding the
foregoing, Healthlink International, Inc. may request the deleti6n or
substitution of this benefit with another.
II. NAC's Fees
--------------
NAG's fees for its duties are as shown in Exhibit 1.
<PAGE>
lIT. Hold Harmless Agreement
----------------------------
Healthlink International, Inc. shall defend, hold harmless and indemnify NAC
against any and all claims, liability, damages or judgements asserted against,
imposed upon or incurred by NAC that arises out of negligence or intentional
wrongdoing of Healthlink International, Inc.
NAC shall defend, hold harmless and indemnify Healthlink International, Inc.
against any and all claims, liability, damages or judgements asserted against,
imposed upon or incurred by Healthlink International, Inc. that arises out of
negligence or intentional wrongdoing of NAC and/or any vendor with whom NAC has
contracted in connection with the discount card program.
IV. Confidentiality
-------------------
The parties to this Agreement acknowledge that the membership list is the sole
property of Healthlink International, Inc., and that it shall be held in
strictest confidence and that the discount plan will contain members of the
Healthlink International, Inc., and neither Healthlink International, Inc. nor
NAC shall be authorized to utilize the list for any purpose whatsoever other
than stated in this Agreement, nor to divulge to any third party the nature and
provisions of this Agreement other than as may be required by law, court
<PAGE>
order or regulatory authorities. This confidentiality required shall survive the
expiration or termination of this Agreement,
V. Term
-------
The initial term of this Agreement shall be a period of three (3) years
commencing effective November 1, 1999 which term shall be automatically extended
for an additional term of one (1) year unless one hundred twenty (120) days
prior to the expiration of the initial three (3) year term, Healthlink
International, Inc. has given NAC, or NAC has given Healthlink International,
Inc., specific written notice of intent to terminate this Agreement. Any
subsequent extension of this Agreement shall automatically be extended for an
additional one (1) year term unless one hundred twenty (120) days prior to the
expiration of any subsequent one (1) year term Healthlink International, Inc.
provides NAC, or NAC provides Healthlink International, Inc., written notice of
the intent to terminate this Agreement at the conclusion of such subsequent one
(1) year term.
VI. Cancellation
----------------
A. If either party defaults in fulfilling any of its obligations under
this Agreement, the other party may serve a written fifteen (15) day
notice upon the defaulting party specifying the nature of said default
<PAGE>
and upon the expiration of said fifteen (15) days, if the defaulting
party shall have failed to comply with the Agreement or remedy such
default, or if the said default or omission complained of shall be of
a nature that cannot be completely cured or remedied in said fifteen
(15) day period, then this Agreement and term thereunder terminate,
and expire.
B. Either party may terminate any part of its obligations and duties
under this Agreement immediately upon receipt of a request or
direction to terminate such activity is unlawful, whether oral or
written, form authorized representatives of Healthlink International
,Inc., either formal or informal, concerning activities engaged in
pursuant to this Agreement. If either party shall desire to terminate
any part of its obligations and duties under this Agreement pursuant
to the provisions of this paragraph B, such party shall send written
notice of the same to the other party.
VII. Offset
-----------
If at any time NAC is in possession of funds due the Healthlink International,
Inc. and at the same time Healthlink International, Inc. is in possession of
funds due NAC, then the parties may upon mutual agreement offset amounts owed
them from the fluids by them owing to the other party.
<PAGE>
VIII. Assignment
----------------
This Agreement shall not be assignable by either party without the prior written
consent of the other party.
IX. Modification
----------------
This Agreement may not be modified, altered or amended in any manner except by
an agreement in writing duly executed by the parties hereto, or as may be
required by any law, regulation or governmental agency in order to be in
compliance with law.
X. Notices
----------
Any notices to be given hereunder by one party to the other may be effected
either by personal delivery in writing or by mail, registered or certified,
postage pre-paid with return receipt requested. Mailed notices shall be
addressed to the parties at the addresses appearing in the introductory
paragraph of this Agreement, each party may change its address by written notice
in accordance with this paragraph. Notices delivered personally shall be deemed
communicated as of five (5) days after mailing.
<PAGE>
XI. Governing Law
-----------------
This Agreement shall be governed and interpreted under the laws of the State of
Missouri.
XII. Arbitration
----------------
Any controversy or claim relating to this Contract, including the construction
or application of this Contract, will be settled by binding arbitration under
the rules of the American Arbitration Association, and any judgement granted by
the arbitrator(s) may be enforced in any court of proper jurisdiction.
XIII. Relationship
------------------
Nothing in this Agreement is intended to nor does it create the relationship of
employer and employee, partner or joint venturer between Healthlink
International, lnc. and NAC.
<PAGE>
XIV. Binding Effect
-------------------
This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns.
XV. No Implied Waiver
---------------------
The failure by any party hereto from time to time to exercise any right or power
provided it herein shall not be construed as a waiver of such party to exercise
such right or power at any subsequent time.
<PAGE>
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this
Agreement on the date and year first above written.
This contract contains a binding arbitration clause.
NATIONAL ADMINISTRATION
COMPANY, INC. HEALTHLINK INTERNATIONAL, INC.
By: /s/ Gary Johnston By: /s/ Nicholas G. Venetis
----------------------------- ---------------------------
Gary Johnston, Vice President Name, Title
<PAGE>
EXHIBIT I
The following is the listing of the program, benefits and NAC's price:
Pharmacy (Retail and Mail Order)
Dental
Vision
Hearing
Chiropractic
Prepaid Legal
NurseLine
Theme Park Discounts
Floral Discounts
Medical ID. Card
Vitamin Discounts
Large Print Books
United Van Lines Moving Discounts
Travel Club
Office Equipment Discounts
Payroll Processing
File Solutions
Crisp Publications
Pre-Employment Background Screening
Odyssey Computer Discounts
Nation Safe Drivers Motor Club
NAC's fee -- $26.70 per member annually.
Exhibit 10.07
HEALTHLINK INTERNATIONAL, INC.
1999 STOCK OPTION PLAN
Article I. Establishment and Purpose
------------------------------------
1.1 Establishment. HealthLink International, Inc., a Nevada corporation
(the "Company"), hereby establishes a stock option plan for officers, directors,
employees and consultants who provide services to the Company, as described
herein, which shall be known as the HealthLink International, Inc. 1999 Stock
Option Plan (the "Plan"). It is intended that options issued under the Plan
shall constitute "Nonstatutory Options" within the meaning of section 422A of
the Internal Revenue Code ("Code").
1.2 Purpose. The purpose of the Plan is to enhance the Company's
stockholder value and financial performance by attracting, retaining and
motivating the Company's officers, directors, employees and consultants and to
encourage stock ownership by such individuals by providing them with a means to
acquire a proprietary interest in the Company's success through stock ownership.
Article II. Definitions
-----------------------
2.1 Definitions. Whenever used herein, the following capitalized terms
shall have the meanings set forth below, unless the context clearly requires
otherwise.
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" shall mean the Committee provided for by Article IV hereof.
(d) "Company" means HealthLink International, Inc., a Nevada corporation.
(e) "Consultant" means any person or entity, including an officer or
director of the Company who provides services to the Company and shall
include a Nonemployee Director, as defined below.
(f) "Date of Exercise" means the date the Company receives notice, by an
Optionee, of the exercise of an Option pursuant to section 8.1 of the Plan.
Such notice shall indicate the number of shares of Stock the Optionee
intends to exercise.
(g) "Employee" means any person, including an officer or director of the
Company who is employed by the Company.
(h) "Fair Market Value" means the fair market value of Stock upon which an
Option is granted under this Plan.
<PAGE>
(i) "Nonemployee Director" means a member of the Board who is not an
employee of the Company at the time an Option is granted hereunder.
(j) "Nonstatutory Option" means an Option granted under the Plan which is
not intended to qualify as an Incentive Stock Option within the meaning of
section 422A of the Code. Nonstatutory Options may be granted at such times
and subject to such restrictions as the Board shall determine without
conforming to the statutory rules of section 422A of the Code applicable to
Incentive Stock Options.
(k) "Option" means the right, granted under the Plan, to purchase Stock of
the Company at the option price for a specified period of time.
(l) "Optionee" means an officer, director, employee or consultant holding
an Option under the Plan.
(m) "Parent Corporation" shall have the meaning set forth in section 425(e)
of the Code with the Company being treated as the employer corporation for
purposes of this definition.
(n) "Significant Shareholder" means an individual who, within the meaning
of section 422A(b)(6) of the Code, owns securities possessing more than ten
percent of the total combined voting power of all classes of securities of
the Company. In determining whether an individual is a Significant
Shareholder, an individual shall be treated as owning securities owned by
certain relatives of the individual and certain securities owned by
corporations in which the individual is a shareholder; partnerships in
which the individual is a partner; and estates or trusts of which the
individual is a beneficiary, all as provided in section 425(d) of the Code.
(o) "Stock" means the $.001 par value common stock of the Company.
2.2 Gender and Number. Except when otherwise indicated by the context, any
masculine terminology when used in this Plan also shall include the feminine
gender, and the definition of any term herein in the singular also shall include
the plural.
Article III. Eligibility and Participation
------------------------------------------
3.1 Eligibility and Participation. All officers, directors, employees and
consultants are eligible to participate in this Plan and receive Nonstatutory
Options hereunder. Optionees in the Plan shall be selected by the Board from
among those officers, directors, employees and consultants who, in the opinion
of the Board, are in a position to contribute materially to the Company's
continued growth and development and to its long-term financial success.
2
<PAGE>
Article IV. Administration
--------------------------
4.1 Administration. The Board shall be responsible for administering the
Plan.
The Board is authorized to interpret the Plan; to prescribe, amend, and
rescind rules and regulations relating to the Plan; to provide for conditions
and assurances deemed necessary or advisable to protect the interests of the
Company; and to make all other determinations necessary or advisable for the
administration of the Plan, but only to the extent not contrary to the express
provisions of the Plan. Determinations, interpretations or other actions made or
taken by the Board, pursuant to the provisions of this Plan, shall be final and
binding and conclusive for all purposes and upon all persons.
The Plan shall be administered by the standing Compensation Committee of
the Board (the "Committee") which is an executive committee of the Board, and
consists of not less than three (3) members of the Board, at least two of whom
are not executive officers or salaried employees of the Company. The members of
the Committee may be directors who are eligible to receive Options under the
Plan, but Options may be granted to such persons only by action of the full
Board and not by action of the Committee. The Committee shall have full power
and authority, subject to the limitations of the Plan and any limitations
imposed by the Board, to construe, interpret and administer the Plan and to make
determinations which shall be final, conclusive and binding upon all persons,
including, without limitation, the Company, the stockholders, the directors and
any persons having any interests in any Options which may be granted under the
Plan, and, by resolution or resolution providing for the creation and issuance
of any such Option, to fix the terms upon which, the time or times at or within
which, and the price or prices at which any Stock may be purchased from the
Company upon the exercise of Options, which terms, time or times and price or
prices shall, in every case, be set forth or incorporated by reference in the
instrument or instruments evidencing such Option, and shall be consistent with
the provisions of the Plan.
The Board may from time to time remove members from or add members to, the
Committee. The Board may terminate the Committee at any time. Vacancies on the
Committee, howsoever caused, shall be filled by the Board. The Committee shall
select one of its members as Chairman, and shall hold meetings at such times and
places as the Chairman may determine. A majority of the Committee at which a
quorum is present, or acts reduced to or approved in writing by all of the
members of the Committee, shall be the valid acts of the Committee. A quorum
shall consist of two-thirds (2/3) of the members of the Committee.
Where the Committee has been created by the Board, references herein to
actions to be taken by the Board shall be deemed to refer to the Committee as
well, except where limited by the Plan or the Board.
The Board shall have all of the enumerated powers of the Committee but
shall not be limited to such powers. No member of the Board or the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any Option granted under it.
3
<PAGE>
4.2 Special Provisions for Grants to Officers or Directors. Rule 16b-3 of
the Securities and Exchange Act of 1934 (the "Act") provides that the grant of a
stock option to a director or officer of a company subject to the Act will be
exempt from the provisions of section 16(b) of the Act if the conditions set
forth in said Rule are satisfied. Unless otherwise specified by the Board,
grants of Options hereunder to individuals who are officers or directors of the
Company shall be made in a manner that satisfies the conditions of said Rule.
Article V. Stock Subject to the Plan
------------------------------------
5.1 Number. The total number of shares of Stock hereby made available and
reserved for issuance under the Plan shall be 1,000,000. The aggregate number of
shares of Stock available under this Plan shall be subject to adjustment as
provided in section 5.3. The total number of shares of Stock may be authorized
but unissued shares of Stock, or shares acquired by purchase as directed by the
Board from time to time in its discretion, to be used for issuance upon exercise
of Options granted hereunder.
5.2 Unused Stock. If an Option shall expire or terminate for any reason
without having been exercised in full, the unpurchased shares of Stock subject
thereto shall (unless the Plan shall have terminated) become available for other
Options under the Plan.
5.3 Adjustment in Capitalization. In the event of any change in the
outstanding shares of Stock by reason of a stock dividend or split,
recapitalization, reclassification or other similar corporate change, the
aggregate number of shares of Stock set forth in section 5.1 shall be
appropriately adjusted by the Board to reflect such change. The Board's
determination shall be conclusive; provided, however, that fractional shares
shall be rounded to the nearest whole share. In any such case, the number and
kind of shares of Stock that are subject to any Option (including any Option
outstanding after termination of employment) and the Option price per share
shall be proportionately and appropriately adjusted without any change in the
aggregate Option price to be paid therefor upon exercise of the Option.
Article VI. Duration of the Plan
--------------------------------
6.1 Duration of the Plan. The Plan shall be in effect until December 31,
2009 unless extended by the Company's shareholders. Any Options outstanding at
the end of said period shall remain in effect in accordance with their terms.
The Plan shall terminate before the end of said period, if all Stock subject to
it has been purchased pursuant to the exercise of Options granted under the
Plan.
Article VII. Terms of Stock Options
-----------------------------------
7.1 Grant of Options. Subject to section 5.1, Options may be granted to
officers, directors, employees and consultants at any time and from time to time
as determined by the Board. The Board shall have complete discretion in
determining the number of Options granted to each Optionee. In making such
determinations, the Board may take into account the nature of services rendered
4
<PAGE>
by such officers, directors, employees or consultants, their present and
potential contributions to the Company, and such other factors as the Board in
its discretion shall deem relevant.
The Board is expressly authorized to issue amended or replacement Options
with respect to shares of Stock subject to an Option previously granted
hereunder. An amended Option amends the terms of an Option previously granted
(including an extension of the terms of such Option) and thereby supersedes the
previous Option. A replacement Option is similar to a new Option granted
hereunder except that it provides that it shall be forfeited to the extent that
a previously granted Option is exercised, or except that its issuance is
conditioned upon the termination of a previously granted Option.
7.2 No Tandem Options. Options shall not contain terms pursuant to which
the exercise of the Option would affect the Optionee's right to exercise another
Option, or vice versa.
7.3 Option Agreement; Terms and Conditions to Apply Unless Otherwise
Specified. As determined by the Board on the date of grant, each Option shall be
evidenced by an Option agreement (the "Option Agreement") that includes the
nontransferability provisions required by section 10.2 hereof and specifies: the
Option price; the term (duration) of the Option; the number of shares of Stock
to which the Option applies; any vesting or exercisability restrictions which
the Board may impose; and any other terms or conditions which the Board may
impose. All such terms and conditions shall be determined by the Board at the
time of grant of the Option.
If not otherwise specified by the Board or by a written agreement between
the Company and the Optionee, the following terms and conditions shall apply to
Options granted under the Plan:
(a) Term. The Option shall be exercisable to purchase Stock for a period of
ten years from the date of grant, as evidenced by the execution date of the
Option Agreement.
(b) Exercise of Option. Unless an Option is terminated as provided
hereunder, an Optionee may exercise his Option for up to, but not in excess
of, the number of shares of Stock subject to the Option specified below,
based on the Optionee's number of years of continuous service with the
Company from the date on which the Option is granted. In the case of an
Optionee who is an officer or employee, continuous service shall mean
continuous employment; in the case of an Optionee who is a director or
consultant, continuous service shall mean the continuous provision of
directorial or consulting services. In applying said limitations, the
amount of shares, if any, previously purchased by the Optionee under the
Option shall be counted in determining the amount of shares the Optionee
can purchase at any time. The Optionee may exercise his Option in the
following amounts:
(i) After one (1) year of continuous services to the Company, the
Optionee may purchase up to 50% of the shares of Stock subject to the
Option;
5
<PAGE>
(ii) After two (2) years of continuous services to the Company, the
Optionee may purchase the remaining 50% of the shares of Stock subject
to the Option.
The Board may specify terms and conditions other than those set forth
above, in its discretion.
All Option Agreements shall incorporate the provisions of the Plan by
reference.
7.4 Option Price. No Option granted pursuant to this Plan shall have an
Option price that is less than the Fair Market Value of the Stock on the date
the Option is granted.
7.5 Term of Options. Each Option shall expire at such time as the Board
shall determine, provided, however, that no Option shall be exercisable later
than ten years from the date of its grant.
7.6 Exercise of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Board shall in each instance approve, which need not be the same for all
Optionees.
7.7 Payment. Payment for all shares of Stock shall be made at the time that
an Option, or any part thereof, is exercised, and no shares shall be issued
until full payment therefor has been made. Payment shall be made (i) in cash or
certified funds, or (ii) if acceptable to the Board, in Stock or in some other
form.
Article VIII. Written Notice, Issuance of
-----------------------------------------
Stock Certificates, Stockholder Privileges
------------------------------------------
8.1 Written Notice. An Optionee wishing to exercise an Option shall give
written notice to the Company, in the form and manner prescribed by the Board.
Full payment for the shares exercised pursuant to the Option must accompany the
written notice.
8.2 Issuance of Stock Certificates. As soon as practicable after the
receipt of written notice and payment, the Company shall deliver to the Optionee
or to a nominee of the Optionee a certificate or certificates for the requisite
number of shares of Stock.
8.3 Privileges of a Stockholder. An Optionee or any other person entitled
to exercise an Option under this Plan shall not have stockholder privileges with
respect to any Stock covered by the Option until the date of issuance of a stock
certificate for such stock.
6
<PAGE>
Article IX. Termination of Employment or Services
-------------------------------------------------
Except as otherwise expressly specified by the Board for Nonstatutory
Options, all Options granted under this Plan shall be subject to the following
termination provisions:
9.1 Death. If an Optionee's employment in the case of an Officer, or
provision of services as a Director or Consultant, terminates by reason of
death, the Option may thereafter be exercised at any time prior to the
expiration date of the Option or within 12 months after the date of such death,
whichever period is the shorter, by the person or persons entitled to do so
under the Optionee's will or, if the Optionee shall fail to make a testamentary
disposition of an Option or shall die intestate, the Optionee's legal
representative or representatives. The Option shall be exercisable only to the
extent that such Option was exercisable as of the date of Optionee's death.
9.2 Termination Other Than For Cause or Due to Death. In the event of an
Optionee's termination of employment, in the case of an officer or employee, or
termination of services as a director or consultant, other than by reason of
death, the Optionee may exercise such portion of his Option as was exercisable
by him at the date of such termination (the "Termination Date") at any time
within three (3) months of the Termination Date; provided, however, that where
the Optionee is terminated due to disability within the meaning of Code section
422A, he may exercise such portion of his Option as was exercisable by him on
his Termination Date within one year of his Termination Date. In any event, the
Option cannot be exercised after the expiration of the term of the Option.
Options not exercised within the applicable period specified above shall
terminate.
In the case of an officer, a change of duties or position within the
Company, shall not be considered a termination of employment for purposes of
this Plan. The Option Agreements may contain such provisions as the Board shall
approve with reference to the effect of approved leaves of absence upon
termination of employment.
9.3 Termination for Cause. In the event of an Optionee's termination of
employment, in the case of an officer or employee or termination of services as
a director or consultant, which termination is by the Company for cause, any
Options held by him under the Plan, to the extent not exercised before such
termination, shall forthwith terminate.
Article X. Rights of Optionees
------------------------------
10.1 Service. Nothing in this Plan shall interfere with or limit in any way
the right of the Company to terminate any employee's employment, or any
consultant's services, at any time, nor confer upon any officer, director,
employee or consultant any right to continue in the employ of the Company or to
provide services to the Company.
7
<PAGE>
10.2 Nontransferability. Options granted under this Plan shall be
nontransferable by the Optionee, other than by will or the laws of descent and
distribution, and shall be exercisable during the Optionee's lifetime only by
the Optionee.
Article XI. Optionee-Officer's
------------------------------
Transfer or Leave of Absence
----------------------------
11.1 Optionee's Transfer or Leave of Absence. For Plan purposes:
(a) A transfer of an Optionee who is an officer or employee within the
Company, or
(b) a leave of absence for such an Optionee which is duly authorized
in writing by the Company,
shall not be deemed a termination of employment. However, an Optionee may not
exercise an Option during any leave of absence, unless authorized by the Board.
Article XII. Amendment, Modification
------------------------------------
and Termination of the Plan
---------------------------
12.1 Amendment, Modification, and Termination of the Plan. The Board may at
any time terminate, and from time to time may amend or modify the Plan. No
amendment, modification or termination of the Plan shall in any manner adversely
affect any outstanding Option under the Plan without the consent of the Optionee
holding the Option.
Article XIII. Acquisition, Merger and Liquidation
-------------------------------------------------
13.1 Acquisition. In the event that an Acquisition occurs with respect to
the Company, the Company shall have the option, but not the obligation, to
cancel Options outstanding as of the effective date of Acquisition, whether or
not such Options are then exercisable, in return for payment to the Optionees of
an amount equal to a reasonable estimate of an amount (hereinafter the "Spread")
equal to the difference between the net amount per share of Stock payable in the
Acquisition, or as a result of the Acquisition, less the exercise price of the
Option. In estimating the Spread, appropriate adjustments to give effect to the
existence of the Options shall be made, such as deeming the Options to have been
exercised, with the Company receiving the exercise price payable thereunder, and
treating the shares receivable upon exercise of the Options as being outstanding
in determining the net amount per share. For purposes of this section, an
"Acquisition" shall mean any transaction in which substantially all of the
Company's assets are acquired or in which a controlling amount of the Company's
outstanding shares are acquired, in each case by a single person or entity or an
affiliated group of persons and/or entities. For purposes of this section a
controlling amount shall mean more than 50% of the issued and outstanding shares
of stock of the Company. The Company shall have such an option regardless of how
the Acquisition is effectuated, whether by direct purchase, through a merger or
8
<PAGE>
similar corporate transaction, or otherwise. In cases where the acquisition
consists of the acquisition of assets of the Company, the net amount per share
shall be calculated on the basis of the net amount receivable with respect to
shares upon a distribution and liquidation by the Company after giving effect to
expenses and charges, including but not limited to taxes, payable by the Company
before the liquidation can be completed.
Where the Company does not exercise its option under this section 13.1, the
remaining provisions of this Article XIII shall apply, to the extent applicable.
13.2 Merger or Consolidation. Subject to any required action by the
stockholders, if the Company shall be the surviving corporation in any merger or
consolidation, any Option granted hereunder shall pertain to and apply to the
securities to which a holder of the number of shares of Stock subject to the
Option would have been entitled in such merger or consolidation.
13.3 Other Transactions. A dissolution or a liquidation of the Company or a
merger and consolidation in which the Company is not the surviving corporation
shall cause every Option outstanding hereunder to terminate as of the effective
date of such dissolution, liquidation, merger or consolidation. However, the
Optionee either (i) shall be offered a firm commitment whereby the resulting or
surviving corporation in a merger or consolidation will tender to the Optionee
an option (the "Substitute Option") to purchase its shares on terms and
conditions both as to number of shares and otherwise, which will substantially
preserve to the Optionee the rights and benefits of the Option outstanding
hereunder granted by the Company, or (ii) shall have the right immediately prior
to such dissolution, liquidation, merger, or consolidation to exercise any
unexercised Options whether or not then exercisable, subject to the provisions
of this Plan. The Board shall have absolute and uncontrolled discretion to
determine whether the Optionee has been offered a firm commitment and whether
the tendered Substitute Option will substantially preserve to the Optionee the
rights and benefits of the Option outstanding hereunder. In any event, any
Substitute Option for an Incentive Stock Option shall comply with the
requirements of Code section 425(a).
Article XIV. Securities Registration
------------------------------------
14.1 Securities Registration. In the event that the Company shall deem it
necessary or desirable to register under the Securities Act of 1933, as amended,
or any other applicable statute, any Options or any Stock with respect to which
an Option may be or shall have been granted or exercised, or to qualify any such
Options or Stock under the Securities Act of 1933, as amended, or any other
statute, then the Optionee shall cooperate with the Company and take such action
as is necessary to permit registration or qualification of such Options or
Stock.
Unless the Company has determined that the following representation is
unnecessary, each person exercising an Option under the Plan may be required by
the Company, as a condition to the issuance of the shares pursuant to exercise
of the Option, to make a representation in writing (a) that the Optionee is
acquiring such shares for his own account for investment and not with a view to,
or for sale in connection with, the distribution of any part thereof, (b) that
9
<PAGE>
before any transfer in connection with the resale of such shares, the Optionee
will obtain the written opinion of counsel for the Company, or other counsel
acceptable to the Company, that such shares may be transferred. The Company may
also require that the certificates representing such shares contain legends
reflecting the foregoing.
Article XV. Tax Withholding
---------------------------
15.1 Tax Withholding. Whenever shares of Stock are to be issued in
satisfaction of Options exercised under this Plan, the Company shall have the
power to require the recipient of the Stock to remit to the Company an amount
sufficient to satisfy federal, state and local withholding tax requirements.
Article XVI. Indemnification
----------------------------
16.1 Indemnification. To the extent permitted by law, each person who is or
shall have been a member of the Board shall be indemnified and held harmless by
the Company against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting from
any claim, action, suit, or proceeding to which he may be a party or in which he
may be involved by reason of any action taken or failure to act under the Plan
and against and from any and all amounts paid by him in settlement thereof, with
the Company's approval, or paid by him in satisfaction of judgment in any such
action, suit or proceeding against him, provided he shall give the Company an
opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's articles of incorporation
or bylaws, as a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.
Article XVII. Requirements of Law
---------------------------------
17.1 Requirements of Law. The granting of Options and the issuance of
shares of Stock upon the exercise of an Option shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
17.2 Governing Law. The Plan and all agreements hereunder shall be
construed in accordance with and governed by the laws of the State of Nevada.
Article XVIII. Effective Date of Plan
-------------------------------------
18.1 Effective Date. The Plan shall be effective on November 15, 1999.
10
<PAGE>
Article XIX. No Obligation to Exercise Option
---------------------------------------------
20.1 No Obligation to Exercise. The granting of an Option shall impose no
obligation upon the holder thereof to exercise such Option.
Dated at Westerville, Ohio, November 15, 1999.
HEALTHLINK INTERNATIONAL, INC.
By________________________________
Menalos G. Venetis, Chief Executive Officer
11
<PAGE>
HEALTHLINK INTERNATIONAL, INC.
NON-STATUTORY STOCK OPTION AGREEMENT
UNDER THE 1999 STOCK OPTION PLAN
Between:
HEALTHLINK INTERNATIONAL, INC.. (the "Company") and_____________________
(the "Optionee") dated _________________
The Company hereby grants to the Optionee an option (the "Option") to
purchase ___________ shares of the Company's common stock ("Stock") under the
HealthLink International, Inc. 1999 Stock Option Plan (the "Plan") upon the
following terms and conditions:
1. Purchase Price. The purchase price of the Stock shall be ___________ per
share, which is not less than the fair market value of the Stock on the date of
this Agreement.
2. Non-Statutory Option. The Option shall be a Non-Statutory Option, as
defined in the Plan.
3. Period of Exercise. Unless otherwise agreed to in writing, the Option
will expire ten years from the date of this Agreement. The Option may be
exercised only while the Optionee is actively providing services to the Company
and as provided in Section 5, dealing with termination of services.
4. Unless otherwise agreed to in writing, the Option may be exercised for
up to, but not in excess of, the amounts of shares subject to the Option
specified below, based on the Optionee's number of years of continuous services
with the Company from the date hereof In applying the following limitations, the
amount of shares, if any, previously purchased by Optionee shall be counted in
determining the amount of shares the Optionee can purchase at any time in
accordance with said limitations. The Optionee may exercise the Option in the
following amounts and in accordance with the conditions set forth in paragraph
7.3 of the Plan:
(1) After one (1) year of continuous services to the Company, the Optionee
may purchase up to 50% of the shares of Stock subject to the Option;
(2) After two (2) years of continuous services to the Company, the Optionee
may purchase the remaining 50% of the shares of Stock subject to the
Option.
In the event the Optionee's services with the Company are terminated due to
Optionee's disability or death as described in paragraphs 5(a) and 5(b), the
foregoing vesting schedule shall be accelerated and the Option shall upon such
disability or death become exercisable in whole or in part.
<PAGE>
This Option may not be exercised for less than fifty shares at any time unless
the number of shares purchased is the total number purchasable at the time under
the Option.
5. Transferability. This Option is not transferable except by will or the
laws of descent and distribution and may be exercised during the lifetime of the
Optionee only by him.
6. Termination of Services. In the event of a termination in the providing
of services by Optionee, including serving as a Non-employee Director as defined
in the Plan, to the Company, the Option may be exercised (to the extent
exercisable at the date of his termination) by the Optionee within three months
after the date of such termination; provided, however, that:
(a) If the Optionee's consulting relationship is terminated because he is
disabled within the meaning of Internal Revenue Code section 422A, the
Optionee shall have one year rather than three months to exercise the
Option (to the extent exercisable at the date of his termination).
(b) If the Optionee dies, the Option may be exercised (to the extent
exercisable by the Optionee at the date of his death) by his legal
representative or by a person who acquired the right to exercise such
option by bequest or inheritance or by reason of the death of the Optionee,
but the Option must be exercised within one year after the date of the
Optionee's death.
(c) If the Optionee's relationship is terminated for cause, this Option
shall terminate immediately.
(d) In no event (including death of the Optionee) may this Option be
exercised more than ten years from the date hereof
7. No Guarantee of Services. This Agreement shall in no way restrict the
right of the Company to terminate Optionee's relationship at any time.
8. Investment Representation: Legend. The Optionee (and any other purchaser
under paragraphs 5(a) or 5(b) hereof) represents and agrees that all shares of
Stock purchased by him under this Agreement will be purchased for investment
purposes only and not with a view to distribution or resale. The Company may
require that an appropriate legend be inscribed on the face of any certificate
issued under this Agreement, indicating that transfer of the Stock is
restricted, and may place an appropriate stop transfer order with the Company's
transfer agent with respect to the Stock.
9. Method of Exercise. The Option may be exercised, subject to the terms
and conditions of this Agreement, by written notice to the Company. The notice
shall be in the form attached to this Agreement and will be accompanied by
payment (in such form as the Company may specify) of the full purchase price of
the Stock to be issued, and in the event of an exercise under the terms of
paragraphs 5(a) or 5(b) hereof, appropriate proof of the right to exercise the
Option. The Company will issue and deliver certificates representing the number
2
<PAGE>
of shares purchased under the Option, registered in the name of the Optionee (or
other purchaser under paragraph 5 hereof) as soon as practicable after receipt
of the notice.
10. Incorporation of Plan. This Agreement is made pursuant to the
provisions of the Plan, which Plan is incorporated by reference herein. Terms
used herein shall have the meaning employed in the Plan, unless the context
clearly requires otherwise. In the event of a conflict between the provisions of
the Plan and the provisions of this Agreement, the provisions of the Plan shall
govern.
HEALTHLINK INTERNATIONAL, INC.
By___________________________________________
Nicholas G. Venetis, Chief Executive Officer
ACCEPTED:
- ---------------------------------
Optionee
3
<PAGE>
HEALTHLINK INTERNATIONAL, INC.
NOTICE OF EXERCISE OF STOCK OPTION ISSUED
UNDER THE 1999 STOCK OPTION PLAN
To: Compensation Committee
HealthLink International, Inc.
929 Eastwind Drive, Suite 225
Westville, OH 43081
I hereby exercise my Option dated __________ to purchase __________ shares
of no par value common stock of the Company at the option exercise price of
$__________ per share. Enclosed is a certified or cashier's check in the total
amount of $________, or payment in such other form as the Company has specified.
I represent to you that I am acquiring said shares for investment purposes
and not with a view to any distribution thereof I understand that my stock
certificate may bear an appropriate legend restricting the transfer of my shares
and that a stock transfer order may be placed with the Company's transfer agent
with respect to such shares.
I request that my shares be issued in my name as follows:
- --------------------------------------------------------------------------------
(Print your name in the form in which you
wish to have the shares registered)
- --------------------------------------------------------------------------------
(Social Security Number)
- --------------------------------------------------------------------------------
(Street and Number)
- --------------------------------------------------------------------------------
(City) (State) (Zip Code)
Dated: _________, 19
Signature:________________________________
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the use, in this Registration Statement on Form SB-2, of
our reort dated July 30, 1999 except for Note 6 and the last two paragraphs of
Note 12 as to which the date is October 28, 1999 relating to the financial
statements of HealthLink International, Inc. for the years ended December 31,
1998 and 1997 and the reference to our firm under the caption "Experts" in the
Prospectus contained in said Registration Statement.
Angell & Deering
Certified Public Accountants
Denver, Colorado
November 10, 1999
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<PERIOD-END> JUN-30-1999
<CASH> 0
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<CGS> 90,695
<TOTAL-COSTS> 182,520
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