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U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
IDMEDICAL.COM, INC.
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(Name of small business issuer in its charter)
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Colorado 7375 84-1506325
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(State or jurisdiction of (Primary Standard Industrial I.R.S. Employer Identification No.
incorporation or organization Classification Code Number)
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4333 N. 30th Street, Boulder, Colorado 80301
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(Address and telephone number of principal executive offices)
4333 N. 30th Street, Boulder, Colorado 80301
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(Address of principal place of business or intended principal place of business)
Neil A. Cox, 4333 N. 30th Street, Boulder, Colorado 80301
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Telephone: (303) 447-8638
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(Name, address and telephone number of agent for service)
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Copies to:
Mitzy A. Sharp Futro, Esq.
Futro & Trauernicht, LLC
1401 Seventeenth Street, 11th Floor
Denver, Colorado 80202
Telephone: (303) 295-3360
Fax: (303) 295-1563
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Approximate date of proposed sale to the public: From time to time after the
effective date of this Registration Statement.
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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. ___
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. ___
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CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed Maximum Amount of
Title of each Class of Securities Amount to be Offering Price Aggregate Offering Registration
to be Registered Registered Per Security (1) Price (1) Fee
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Common Stock, $.001 par value 2,481,500 (2) $1.00 $2,466,500 $ 653.00
Common Stock, $.001 par value 1,250,000 (3) $1.10 $1,375,000 $ 365.00
Common Stock, $.001 par value 1,000,000 (3) $2.00 $2,000,000 $ 528.00
Total Registration Fee..... $1,546.00
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 promulgated under the Securities Act of 1933.
(2) Represents outstanding shares held by selling security holders
including an indeterminate number of shares which may become issuable
in the event of a stock split, stock dividend or similar transaction
involving the common stock.
(3) Represents shares which may be issuable upon exercise of warrants
issued to three selling securityholders. Includes an indeterminate
number of shares which may become issuable in the event of a stock
split, stock dividend or similar transaction involving the common
stock pursuant to antidilution provisions of the warrants.
The Company hereby amends this registration statement on such date or dates as
may be necessary to delay its effective date until the Company 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 or until the registration statement shall become effective on
such date as the Securities and Exchange Commission, acting pursuant to said
section 8(a), may determine.
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SUBJECT TO COMPLETION, DATED OCTOBER 10, 2000
PRELIMINARY PROSPECTUS
IDMEDICAL.COM, INC.
4,731,500 SHARES
COMMON STOCK
The selling securityholders named below are selling up to 4,731,500 shares of
the common stock of IDMedical.com, Inc. under this prospectus, including up to
2,250,000 shares that they may acquire upon exercise of warrants.
IDMedical.com, Inc. ("IDMedical" or "IDMedical.com") has not made any
underwriting arrangements regarding the common stock. Selling securityholders
may offer their shares of common stock in the manner described in the "Plan of
Distribution" on page 31. The shares may be offered in public or private
transactions, on or off any national securities exchange or automated quotation
system on which the common stock may be listed or traded. The shares may be
offered at prevailing market prices or privately negotiated prices.
Sales may be made through brokers, dealers, or other agents who may receive
compensation in the form of commissions, discounts, or concessions. The selling
securityholders and participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act. If so, any commission,
discount, or concession they receive may be deemed to be underwriting
compensation.
IDMedical.com, Inc. will not receive any proceeds from the sale of the common
stock, but may receive proceeds from the exercise price of the warrants.
THIS IS A SPECULATIVE INVESTMENT AND INVOLVES A HIGH DEGREE OF RISK. CAREFULLY
CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 4 BEFORE PURCHASING THIS COMMON
STOCK.
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.
The information in this prospectus is subject to completion or amendment. These
securities may not be sold, and offers to buy may not be accepted, until the
registration statement we filed with the Securities and Exchange Commission
becomes effective.
This prospectus is not an offer to sell and does not solicit offers to buy our
common stock. These securities cannot be sold in states where an offer,
solicitation, or sale of them would be unlawful until they are registered or
qualified under the securities laws of such states.
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TABLE OF CONTENTS
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SECTION PAGE
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1. Cautionary Statement Concerning Forward Looking Statements.............................3
2. Risk Factors...........................................................................4
3. Description of Business...............................................................13
4. Legal Proceedings ....................................................................23
5. Description of Property...............................................................23
6. Market for Common Stock and Related Shareholder Matters...............................24
7. Plan of Operation.....................................................................24
8. Directors and Executive Officers......................................................25
9. Ownership of Securities by Beneficial Owners and Management...........................26
10. Executive Compensation................................................................27
11. Certain Relationships and Related Transactions........................................28
12. Selling Securityholders...............................................................29
13. Plan of Distribution..................................................................31
14. Description of Securities.............................................................32
15. Indemnification Disclosure............................................................33
16. Changes In and Disagreements With Accountants.........................................34
17. Legal Matters.........................................................................34
18. Where You Can Find More Information...................................................34
19. Financial Statements..................................................................35
20. Exhibits Index........................................................................39
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DEALER PROSPECTUS DELIVERY OBLIGATION
ALL DEALERS THAT PERFORM TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS
IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING
AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
This prospectus is part of a registration statement we filed with the
Securities and Exchange Commission. You should only rely on the information or
representations contained in this prospectus. We have not authorized anyone to
provide you with different information. Do not assume that the information in
this prospectus is accurate after the date on the cover.
This common stock may not be offered in states where such an offer is not
permitted.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This prospectus and documents included by reference contain forward-looking
statements within the meaning of:
- Section 27 of the Securities Act of 1933;
- Section 21E of the Securities Exchange Act of 1934; and
- the Private Securities Litigation Reform Act of 1995.
Forward-looking statements relate to our future operations. They estimate the
happening of future events and are not based on historical facts.
Forward-looking statements may be identified by terms such as:
o believes
o intends
o projects
o forecasts
o predicts
o may
o will
o expects
o estimates
o anticipates
o probable
o continue
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This list is not comprehensive. Similar terms, variations of those terms, and
the negative of those terms may also identify forward-looking statements.
The "Risk Factors" discussed in this prospectus are cautionary statements. They
identify some of the factors that could cause actual results to be
significantly different from those predicted in the forward-looking statements.
The forward-looking statements and documents included by reference were
compiled by our management based upon assumptions they considered reasonable.
These assumptions are subject to significant business, economic, and
competitive uncertainties and contingencies, many of which are beyond our
control. Therefore, forecasted and actual results will likely vary and those
variations may be material.
There can be no assurance that the statements, estimates, and projections
contained in this prospectus will be achieved. Thus, we make no representation
or warranty as to their accuracy or completeness. In addition, we cannot
guarantee that any forecast in this prospectus will be achieved.
These forward-looking statements were compiled as of the date of this
prospectus or the date of the documents incorporated by reference, as the case
may be. We do not intend to update these statements. Therefore, you should
evaluate them by considering any changes that may have occurred after the date
such forward-looking statements appear.
We cannot guarantee that any of the assumptions relating to the forward-looking
statements or the documents incorporated by reference will prove to be
accurate. Therefore, we urge you and your advisors to review these
forward-looking statements, to consider the assumptions upon which they are
based, and to ascertain their reasonableness.
RISK FACTORS
An investment in our common stock involves major risks, including those
associated with our development and our industry as a whole. You should
carefully consider the following risk factors, as well as the other information
in this prospectus, when deciding whether to purchase our common stock.
RISKS ASSOCIATED WITH DEVELOPMENT STAGE COMPANIES
EARLY STAGE OF DEVELOPMENT
We were incorporated in June 1999 and have minimal operating history. Before
making an investment in our company, you must consider the risks,
uncertainties, expenses, and difficulties frequently encountered by companies
in the early stages of development. This is especially true for companies in
the Internet market. Examples of these risks and difficulties include our
ability to:
o attract a large audience of users to our Internet-based
consumer healthcare network;
o increase awareness of our products and services;
o strengthen user loyalty and increase the number of registered
users;
o offer compelling on-line content, services, and product
offerings;
o maintain current and develop new affiliate relationships;
o respond effectively to the offerings of competitors on the
Internet;
o continue to develop and upgrade our technology; and
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o attract, retain, and motivate qualified personnel.
We also depend on general economic conditions as well as continued growth in
Internet usage for advertising, commerce, and communication. We cannot assure
you that our business strategy will be successful or that we will successfully
address these risks or difficulties. If we do not adequately address any of
these risks, our business will likely suffer.
LACK OF REVENUE; ANTICIPATED LOSSES; UNCERTAINTY OF FUTURE FINANCIAL RESULTS
We have no operating history and, therefore, no revenues. Any future revenues
and operating results may vary significantly from quarter to quarter due to a
number of factors, not all of which are in our control. If we have a shortfall
in revenue relative to our expenses, or if our expenses increase faster than
our revenues, our business will be adversely affected. Important factors that
could cause material fluctuations in our results include:
o traffic levels on our Internet site;
o our ability to attract and retain customers;
o our ability to maintain customer satisfaction for existing
and future product and service offerings;
o new Internet sites, services, or products introduced by us or
our competitors;
o our ability to upgrade and develop our systems and
infrastructure;
o our ability to attract new personnel in a timely and
effective manner;
o our ability to successfully integrate operations and
technologies from acquisitions, joint ventures, or other
business combinations or investments; and
o technical difficulties or system downtime affecting the
operation of our web site.
Any revenues for the foreseeable future will depend on user subscription levels
on our web site and affiliate subscription levels. These future revenues are
difficult to forecast. In addition, we plan to increase our sales and marketing
operations, expand and develop content, and upgrade and enhance our technology
and infrastructure development in order to support our anticipated growth. Many
of the expenses associated with these activities -- for example, costs
associated with personnel, technology, and infrastructure -- are relatively
fixed in the short-term. We may be unable to adjust spending quickly enough to
offset unexpected revenue shortfalls. If so, our operational results will
suffer.
We expect that our current reserves will be sufficient to meet our operating
expenses for the next 12 months. After that time, we will either need to raise
additional funds or realize additional revenue from our business activities to
meet our cash requirements. There can be no guarantee that we will be
successful in securing additional financing should the need arise.
NO FORMAL MARKET RESEARCH
We have not conducted, or engaged any other person or entity to conduct, any
formal marketing surveys or research regarding the potential for our proposed
products and services. Management's views concerning the potential for our
proposed products and services are personal and are not based upon any
empirical data or formal market research. There can be no assurance that a
market for our proposed products and services exists or, if such a market
exists, that such market is of the magnitude anticipated by Management.
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NEED TO ATTRACT AND RETAIN KEY EMPLOYEES AND CONSULTANTS; LACK OF "KEY PERSON"
LIFE INSURANCE
We are highly dependent on our corporate officers and directors. Losing any of
their services would significantly delay or prevent the achievement of our
development or business objectives. In addition to our employees, we will most
likely retain consultants to complement the extensive computer hardware and
software industry experience of Dr. Richard J. Schaller, Sr. (our President)
and the extensive medical background and experience of Dr. Richard J. Schaller,
Jr. and Dr. Vincent E. Schaller (directors). These consultants will be
independent contractors, not employees of IDMedical.
We may be required to hire additional qualified personnel to implement our
business plan, as well as personnel with expertise in government regulation,
computer networking and Internet software, hardware and marketing. These
requirements may also demand the addition of management personnel. We face
competition for qualified individuals from numerous Internet companies. There
can be no assurance that we will be able to attract and retain such individuals
on acceptable terms, if at all. Failure to do so could have a material adverse
effect on us.
We do not currently maintain "key person" life insurance on the life of any of
our officers, directors, or consultants. See "Management."
FUTURE ISSUANCES OF COMMON STOCK WILL DILUTE THE INTEREST OF CURRENT
SHAREHOLDERS
If additional shares are issued, your stock ownership will be diluted.
Additional stock or options to acquire stock of IDMedical can be granted at any
time by the board of directors, usually without shareholder approval.
FUTURE SALES OF COMMON STOCK MAY AFFECT CURRENT SHAREHOLDERS
Future sales of common stock by management personnel and others may be made
under Rule 144 of the 1933 Act. Under this rule, a person who has held their
stock for one year may, under certain circumstances, sell in any three-month
period a number of shares which is not greater than:
o one percent of the then outstanding shares of common stock;
or
o if qualified, the average weekly trading volume in shares
during the four calendar weeks immediately prior to such
sale.
Under certain circumstances, shares may be sold if a person who is not
affiliated with IDMedical has held them for two years.
In the future, management personnel and others may acquire shares of common
stock that may be registered on Form S-8. These shares may be sold in
compliance with state securities laws without restriction by non-affiliates.
Those affiliated with IDMedical may sell these shares either:
o under Rule 144, but without the one-year holding period; or
o pursuant to an effective reoffer prospectus filed for the
Form S-8.
Future sales of common stock may have an adverse effect on the market price of
the common stock. This could adversely affect our ability to obtain future
funding and could create a potential market overhang.
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WE DO NOT ANTICIPATE PAYING DIVIDENDS
The board of directors has the sole authority to determine whether cash
dividends will be paid. This decision will depend on many factors, such as
earnings, capital requirements, and our financial condition. The board of
directors does not anticipate paying cash dividends in the near future.
WE DO NOT YET HAVE AN INDEPENDENT TRANSFER AGENT
We currently maintain our own stock transfer records. While we have engaged the
services of an independent transfer agent, they will not commence operations on
our behalf until the time this registration statement becomes effective.
POTENTIAL FOR CONFLICTS OF INTEREST
Our officers and directors may serve as officers or directors for other
businesses having similar or different objectives. Although our officers and
directors will use their best efforts to present us with suitable
opportunities, they are under no obligation to present us with any particular
opportunity.
All of our officers and directors are engaged in activities outside of
IDMedical. They will be devoting less than 100% of their time to our affairs.
Their outside activities could also conflict with those of IDMedical. In other
words, our officers and directors may divide their time between our operations
and operations in which we have no interest. In dealing with potential
conflicts or conflicts which may arise as a result of their outside activities,
the officers and directors:
o will attempt to conduct themselves in accordance with their
fiduciary obligations to us;
o will act prudently; and
o will act in our overall best interest.
COMPETITION EXISTS FOR MANY OF THE CLIENTS WE WILL BE SEEKING
Other companies exist which compete, on some level, with IDMedical. While
differences exist which lead us to believe that current competition is not a
direct threat to our success, some of the competition is likely to enjoy
substantial competitive advantages compared to IDMedical. These advantages
include greater name recognition and substantially greater financial resources.
Increases or changes in competition could reduce our return on investment or
cut into our market share. See "Description of Business, Business of Issuer --
Competition."
With respect to our Internet business strategy, we may face significant
competition from other Internet companies, some of which have greater resources
and financial power than IDMedical. The development of products and services on
the Internet is intensely competitive. As a result, it may be easier and
cheaper for other companies to enter our proposed markets and these companies
may be able to respond more quickly to changes in the market for Internet
services. We expect additional competitors to enter the market. Increased
competition could put pressure on prices, reduce margins, or result in our
failure to achieve or maintain market acceptance with respect to the Internet
aspect of our business. See "Description of Business, Business of Issuer --
Competition."
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RISKS RELATED TO THE INDUSTRY
ABILITY TO EXPAND NETWORK INFRASTRUCTURE
We intend to continually expand and adapt our network infrastructure to
accommodate additional users, increasing transaction volumes, and changing
consumer and customer requirements. We may not be able to accurately project
the rate or timing of increases, if any, in the use of our web site or to
expand and upgrade our systems and infrastructure to accommodate such
increases. Our systems may be unable to accommodate such increases while
maintaining acceptable overall performance. Any lapse in service could cause
our users to switch to the on-line services of our competitors.
POTENTIAL LIABILITY FOR INFORMATION ACCESSED ON OUR WEB SITE
We could be sued if confidential information is used or disclosed
inappropriately. These types of claims have been brought against on-line
services in the past, sometimes successfully. While our agreements may provide
that we will be indemnified against these liabilities, such indemnification may
be inadequate. In addition, our errors and omissions insurance may not
adequately protect us against these types of claims.
Our business is based on establishing the IDMedical.com network as a
trustworthy and dependable provider of services. Allegations of impropriety,
even if unfounded, could have a material adverse effect on our reputation and
our business.
POSSIBLE FAILURE OR INABILITY TO PROTECT INTELLECTUAL PROPERTY RIGHTS
Our intellectual property is important to our business. We rely or intend to
rely on a combination of copyright, trademark, patent and trade secret laws,
confidentiality procedures, and contractual provisions to protect our
intellectual property. Applications for federal registrations are pending for
the trademark "IDMEDICAL.com," as well as other service marks and trademarks
which incorporate the Dr. E-MED name. See "Description of Business --
Intellectual Property."
UNCERTAINTY OF PROTECTION OF TRADEMARK, COPYRIGHTS, AND PROPRIETARY RIGHTS
Our success will depend in part on our ability to:
o obtain registration of our trademarks, service marks,
copyrights, and patents;
o maintain our trade secrets; and
o operate without infringing on the proprietary rights of
others.
This applies in the United States as well as other countries. Intellectual
property matters in the Internet industry are highly uncertain and involve
complex legal and factual questions. Accordingly, the extent of claims allowed
with respect to the Internet intellectual property rights of others cannot be
predicted.
We have filed applications for registration of the "Dr. E-MED" character and
all copyrightable aspects of our web site with the United States Copyright
Office. We have filed applications with the United States Patent and Trademark
Office to register the following as service marks:
o The name IDMEDICAL.com,
o The proprietary character, "Dr. E-MED," as a logo, and
o The character's name, "Dr. E-MED," as a word mark or "Dr.
E.Z.MED" as an alternative word mark.
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We are currently investigating our options with regards to patent protection
for various aspects of our web site. We cannot guarantee that:
o we will be able to develop Internet products or processes
that are patentable;
o patents will issue from any applications; or
o claims allowed on issued patents will be sufficient to
protect our technology.
In addition, patents we may obtain, as well as any rights associated with such
patents, may be challenged, invalidated, or circumvented. This also applies to
patents underlying any license to make, use, and sell our products or services.
In short, there can be no assurance that the rights granted under any patents
issued to us will provide proprietary protection or competitive advantage.
Competitors may file applications for and receive patents and other proprietary
rights that relate to products or processes that are competitive with ours. If
so, this could affect our issued patents or efforts to obtain patents. See
"Description of Business -- Intellectual Property."
Our commercial success will depend in part on our ability to avoid infringing
the patent and other intellectual property rights owned by third parties. It is
uncertain whether the issuance of any third-party patents would require us to
obtain licenses, cease certain activities, or alter our services, products, or
processes. It is possible that our competitor's applications or patents may
conflict with the patents or inventions underlying our intellectual property
rights. Even so, we are not aware of any companies that have either filed
patent applications or been granted patents in the United States or other
countries claiming subject matter that may be useful to us for some of our
potential products or services.
Patents may exist or may be issued to other companies that contain competitive
or conflicting claims. If such claims are determined to be valid, we may be
required to obtain a license to these patents or develop or obtain alternative
processes or technology. If licenses are required, there can be no assurance
that we will be able to obtain them on commercially favorable terms, if at all.
If we are unable to obtain licenses, we may be prevented from pursuing the
development of potential products or services.
If we breach an existing license or fail to obtain a license to any technology
required to commercialize our products, it could have a negative impact on our
business. In addition, the following actions may be required to enforce or
defend any patents issued or licensed to us or to determine the scope and
validity of third-party proprietary rights:
o litigation;
o interference proceedings in the United States Patent and
Trademark Office;
o oppositions in foreign countries; or
o reexaminations.
These actions could result in substantial costs and diversion of our efforts.
If our competitors prepare and file patent applications in the United States
that claim technology or processes also claimed by us, we may have to
participate in interference proceedings declared by the United States Patent
and Trademark Office to determine priority of invention. This could result in
substantial cost to us, even if the eventual outcome is favorable to us.
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We also intend to rely on trade secrets to protect our technology, especially
where patent protection is not believed to be appropriate or obtainable.
Proprietary technology and processes will most likely be protected through
confidentiality agreements and assignments with our consultants and
collaborators. There can be no assurance that:
o these agreements will provide meaningful protection;
o these agreements will not be breached;
o we will have adequate remedies for any breach; or
o our trade secrets will not otherwise become known or
independently discovered by competitors.
To the extent that IDMEDICAL, our consultants, or our collaborators use
intellectual property owned by others in their work for the Company, disputes
may also arise as to the rights in related or resulting know-how and
inventions. See "Description of Business -- Intellectual Property."
PATIENTS' AND HEALTHCARE INDUSTRY'S ACCEPTANCE OF THE INTERNET
To be successful, our network must attract a significant number of customers as
well as other participants in the healthcare industry. To date, patients have
generally looked to healthcare professionals as their principal source for
health and wellness information. Our business plan assumes that:
o patients will use healthcare information that is available on
the Internet; and
o local healthcare organizations will affiliate with us.
This business plan is not yet proven. If we are unable to successfully
implement it, our business will be materially adversely affected.
INTENSE COMPETITION IN A RAPIDLY CHANGING INDUSTRY
The number of Internet web sites offering healthcare content, products, and
services is vast and increasing at a rapid rate. These companies compete with
us for users. In addition, traditional media and healthcare providers compete
for consumers' attention through traditional means as well as through new
Internet initiatives. We believe that competition for healthcare consumers will
continue to increase as the Internet continues to develop as a communication
and commercial medium.
Potentially, we will compete directly for users with numerous Internet and
non-Internet businesses, including:
o health-related on-line services or web sites targeted at
consumers, such as drkoop.com, WebMD Inc., Medscape Inc.,
PersonalMD.com, and MedicaLogic, etc.;
o on-line and Internet portal companies, such as America
Online, Inc., Microsoft Network, Netscape, Yahoo! Inc.,
Excite, Inc., Lycos Corporation, and Infoseek Corporation;
and
o other consumer affinity groups which offer healthcare-related
content to specific demographic groups.
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While differences exist which lead us to believe that current competition is
not a direct threat to our success, some of the competition is likely to enjoy
substantial competitive advantages compared to IDMedical, including:
o the ability to offer a wider array of on-line products and
services;
o larger production and technical staffs;
o greater name recognition and larger marketing budgets and
resources;
o larger customer and user bases; and
o substantially greater financial, technical, and other
resources.
To be competitive, we must respond promptly and effectively to the challenges
associated with technological change, evolving standards, and competitors'
innovations. Increased competition could result in a loss of market share or a
reduction in our prices or margins. Competition may increase significantly as
new companies enter the market and current competitors expand their services.
Please see "Description of Business -- Competition."
GOVERNMENT REGULATION RELATING TO THE INTERNET
Since we operate an Internet-based service, our business is subject to
government regulation relating to the Internet that could impair our
operations. Because of the increasing use of the Internet as a communication
and commercial medium, the government has adopted laws, and may adopt
additional laws and regulations, with respect to the Internet. These laws and
regulations cover such areas as user privacy, pricing, content, taxation,
copyright protection, distribution, and characteristics and quality of
production and services. For a description of risks associated with
governmental regulation relating to the Internet, please see "Description of
Business -- Internet Policies" on page 23.
INTERNET CAPACITY CONSTRAINTS
Our success will depend, in large part, upon the continued development of a
robust communications industry and infrastructure for providing Internet access
and carrying Internet traffic. The Internet may not prove to be reliable at all
times because of:
o inadequate development or unexpected impairment of the
necessary infrastructure as a reliable network backbone;
o failure of timely development of complementary products such
as high speed modems;
o delays in the development or adoption of new standards and
protocols required to handle increased levels of Internet
activity; or
o increased government regulation.
If the Internet continues to experience significant growth in the number of
users and the level of use, its infrastructure may experience problems in
supporting the demands placed on it.
DEPENDENCE ON THE CONTINUOUS, RELIABLE AND SECURE OPERATION OF OUR WEB SITE
We rely on the Internet and, accordingly, depend upon the continuous, reliable,
and secure operation of Internet servers and related hardware and software. In
the past, several large Internet commerce companies have suffered highly
publicized system failures that resulted in adverse consequences to their
customers and subscribers. To the extent that our service is interrupted, which
could occur due to reasons beyond our control, our users will be inconvenienced
and our reputation may be diminished. Some of these outcomes could directly
result in significant negative publicity and litigation.
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Our computer and communications hardware is protected through physical and
software safeguards. However, they are still vulnerable to fire, storm, flood,
power loss, telecommunications failures, physical or software break-ins, and
similar events. We do not have full redundancy for all of our computer and
telecommunications facilities and do not, at this time, maintain a back-up data
facility. Business interruption insurance may be inadequate to protect us in
the event of a catastrophe. We also depend upon third parties to provide
potential users with web browsers and Internet and on-line services necessary
for access to our web site. It is conceivable that our users may occasionally
experience difficulties with Internet and other on-line services due to system
failures, including failures unrelated to our systems. Any sustained disruption
in Internet access provided by third parties, such as Internet Service
Providers could adversely impact our business.
We retain confidential customer information in our database. Therefore, it is
critical that our facilities and infrastructure remain secure and are perceived
by consumers to be secure. Despite the implementation of security measures, our
infrastructure may be vulnerable to physical break-ins, computer viruses,
programming errors, or similar disruptive problems. A material security breach
could damage our reputation or result in liability to us.
NO PUBLIC MARKET FOR OUR STOCK
NO PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK
There has been no public market for our common stock. Furthermore, there can be
no assurance that an active trading market will be created or sustained in the
future. If a market does develop, on the OTC Bulletin Board or otherwise, there
can be no assurance that such market will continue or that the price of the
stock will rise.
Securities of Internet companies have historically been very volatile. The
stock can expect substantial price changes in short periods of time due to this
unpredictability. Stock markets in the United States have, from time to time,
experienced significant price and volume fluctuations that are not necessarily
related to a company's net worth or any other established criteria of value.
Substantial stock price swings may occur for the foreseeable future and
percentage changes in stock indices (such as the Dow Jones Industrial Average)
could be magnified, particularly in downward movements of the markets. These
fluctuations may adversely affect the price of our common stock.
RESTRICTIONS ON SECONDARY TRADING
If our stock does begin trading, such trading will be subject to legal
restrictions as long as it trades below $5.00 per share. These restrictions
will limit the ability of broker-dealers who sell such securities to anyone
other than established customers and investors that meet certain sophisticated
investor tests. These restrictions can affect the ability of broker-dealers to
sell IDMedical's stock and can also affect your ability to resell your stock in
any trading market that may develop.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS INCLUDED IN THIS
PROSPECTUS
With the exception of historical matters, the materials discussed or
incorporated by reference in this prospectus are forward-looking statements.
These statements involve risks and uncertainties that could cause actual
results to be materially different from targeted or projected results. These
forward-looking statements include statements regarding the intent, belief, or
current expectations of IDMedical and its officers and directors. This includes
future economic, competitive, and market conditions, as well as future business
decisions. All of these are difficult or impossible to accurately predict. Many
of these factors are beyond our control. Therefore, you should not place undue
reliance on forward-looking statements.
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DESCRIPTION OF BUSINESS
BUSINESS DEVELOPMENT
We were incorporated in June 1999 under the laws of the State of Colorado for
the purpose of developing medical records on the Internet. To date, we have
conducted minimal business operations.
BUSINESS OF ISSUER
Company Overview
IDMedical.com is a development stage company that intends to create an Internet
application consisting of a customer database of important medical information.
The web site will allow the patient or an authorized person to input and access
the patient's medical history. IDMedical intends to be at the forefront of
voluntarily submitted medical records on the Internet.
The need for medical information can arise at any time. Situations often arise
when a patient needs to be treated by an unfamiliar doctor. This can occur when
the patient's regular doctor is unavailable or when the patient is traveling
away from home or visiting the local emergency room. Timely access to the
patient's medical records can prevent substandard care that may result in poor
or dangerous results. In addition, many medical practices have other doctors
cover their patients when they are on vacation or out of the office for the
weekend. IDMedical.com will provide these doctors with the information they
need to care for unfamiliar patients in a quick, safe, and effective manner.
IDMedical.com will be a system that allows the patient, a family member,
friend, or the patient's doctor to input the patient's medical information into
a computer program on the Internet. Access to this program will be through a
web site. The data input mode is designed to be user friendly. The patient can
either go into an input mode and type the data directly into the computer or go
through a question and answer session with "Dr. E-MED," a computerized
assistant that will help the patient input their medical records.
Data input will be automated through the use of scroll bars and prompts. For
example, after the patient enters her name, a data box will appear. This box
will allow the patient to input data such as:
o sex, age, date of birth, marital status, and social security
number;
o current and past medical problems;
o updated prescription lists;
o allergies; and
o past medical history, surgeries, and hospitalizations.
Once this information has been entered, patients will be able to print a copy
of their medical record for future reference. The patient's religious
affiliation will also be included on the medical record.
Patients' medical information will be stored in a secure database on a secure
server. Patients and doctors will be able to access this data on the Internet
through a series of passwords, starting with a User ID and a self-defined
password. Once in the system, the patient or physician must enter the patient's
User ID and password to access the patient's file. The information received by
the doctor must be verified for accuracy with the patient or the patient's
family.
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Our web site will initially be used to treat patients on an emergency basis.
When the need arises, doctors can access the personal and medical information
previously listed. The amount of information available will eventually be
expanded to include additional patient history and medical data, such as
vaccinations and test results (e.g., PSA, PAP, mammograms, and EKG).
The medical records on IDMedical.com will remain confidential. Initially, the
only people who will have access to a patient's medical records will be the
patient and those physicians who know the patient's User ID and password. In
the future, registered doctors may enter the system using only the patient's
name and Social Security Number, if the member elects this option. We do not
believe it is wise to allow unlimited physician access to the medical records
maintained on our web site at this time.
IDMedical must be able to verify that all doctors accessing the medical records
on the Company's web site are licensed physicians. We plan on using other web
sites to perform this function. For example, the American Medical Association
("AMA") has a web site with a members only section that physicians may access
by entering their unique AMA number. Other medical web sites, such as state
medical societies and the American College of Surgeons, Pediatrics, Internal
Medicine, and Emergency Physicians, have a similar setup. Once physician
verification has been accomplished on one of these web sites, doctors will be
able to access IDMedical.com through a link. This approach saves us the time
and expense involved with establishing our own verification system.
Doctors will be greeted with a welcome page when they access the IDMedical.com
site by a link from another medical web site. Physicians visiting our web page
for the first time will be given a questionnaire that will ask for certain
personal information, such as license number, social security number, and DEA
number. They will then select a User ID and a password. The next time they
visit our site, they will only have to enter their User ID, password, and DEA
number to access our database.
Under our current pricing model (which is subject to change), patients will be
charged $15 for a one-year membership with IDMedical.com. A family of four can
establish a one-year account for $25. After the first year, the annual fee will
be lowered to $10. All payments will be made by credit card. This will help
confirm the identity of the members.
Dr. E-MED Character
We feel, based on actual experience of two of our directors who are physicians,
that there is a real need to have ready access to patients' medical records.
Therefore, we propose to fill this need with a service that will be user
friendly and affordable, using the latest technology on the Internet. To do
this, we have introduced the "Dr. E-MED" character. Dr. E-MED will become the
customer's personal assistant who will lead them through the process of filling
out their personal medical records. We intend to make the customer feel that
Dr. E-MED is not only their on-line Internet assistant, but also a friend they
can rely on to help input their information and keep their medical records
up-to-date, accurate, and secure.
The Dr. E-MED character is our corporate "Internet Spokesperson." Dr. E-MED
will be an interviewer on our web page and will appear on our corporate
literature, including marketing materials, letterheads, envelopes, and business
cards. He will also appear on all customer medical reports and ID cards.
Membership Card
Every member of IDMedical.com will receive one membership card for each adult.
The member should carry this card at all times. The purpose of the membership
card is to identify our member to an attending physician in either an emergency
or an "out-of-office" medical experience.
The IDMedical.com membership card will include the member's name, social
security number and religious affiliation, along with the basic medical
information needed by the attending physician. This information will include
the member's primary physician and phone number, primary family contact and
phone number, blood type, organ donor, allergies, and drug sensitivities.
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Another unique feature that our members will receive is an IDMedical.com orange
label to be placed on the back of their driver's license (where legal and
without covering pertinent information). This label will give the
www.IDMedical.com Internet address. The purpose of this label is to provide
immediate awareness to an attending physician that the patient is a member of
IDMedical.com. The web site address will give the physician the medical
information required to treat the patient.
Industry Overview
The Internet has become an important alternative to traditional media, enabling
millions of consumers to seek information, communicate with one another, and
execute commercial transactions electronically. The Internet is distinct from
traditional media in that it offers real-time access to dynamic and interactive
content and instantaneous communication among users. These characteristics,
combined with the fast growth of both Internet users and usage, have created a
powerful, rapidly expanding direct marketing and sales channel.
In addition, on-line communities have emerged that allow users with similar
interests to engage in interactive activities. Until recently, use of the
Internet consisted mainly of users seeking one-way, static information on
topics of interest to them. Technologies have recently been developed that
allow users greater flexibility to create and personalize content, communicate
with users having similar interests, and engage in other interactive
activities. We believe that on-line communities are particularly relevant to
users interested in healthcare issues, since medical information is often
complex and people value communication with peers who are facing, or have
faced, the same health conditions.
Competition
The on-line healthcare market is new, rapidly evolving and intensely
competitive. IDMedical expects competition to intensify in the future since
barriers to entry are minimal, allowing current and new competitors to launch
new web sites at a relatively low cost. In addition, the Internet medical
information industry is intensely active and competitive. We must compete with
a variety of other companies, including drkoop.com, WebMD Inc., Medscape Inc.,
PersonalMD.com, and MedicaLogic.
We believe that we have a competitive advantage with our service since it
appears that only some of our competitors is involved with this service to
date. However, companies like drkoop.com are planning to become involved in
medical records. PersonalMD.com already has a web site that allows customers to
enter their medical records into a database. However, we are unaware of any
site dedicated solely to this purpose.
There is no guarantee that medical records maintained on competitors' web sites
would remain confidential since most of them derive revenues from corporate
advertising and sponsorship. As stated in the New York Times on September 5,
1999, "the distinction between objective information and advertising has
blurred across much of the web," with "many sites receiving a commission for
referring their users to on-line merchants and what would be called advertisers
in other media are often labeled partners." Instead of relying primarily on
corporate advertising and sponsorship, we will rely on enrollment and renewal
fees for the majority of our revenues, allowing us to maintain independence and
strict confidentiality standards with regard to our users' information.
Our revenues will come primarily from enrollment fees. This gives the customer
ownership of his medical information. Company policy will prohibit the
disclosure or sharing of the customer's personal or medical information with
any third parties, including corporations and insurance companies. Since the
customer pays for these records, they are the customer's property and can be
changed or deleted at will by the customer.
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There are other advantages and features that differentiate us from the
competition. These include the following:
1. Getting a Complete Medical History.
Our organ-by-organ approach to data entry allows the member
to probe their memory for illnesses, thereby creating a more
complete database than others which simply utilize broad
questions, such as "Have you ever had any surgeries."
2. Easy Access to Patient's Records By Doctors.
As part of this commitment, we won't have advertisers
cluttering the doctors' access area. We will be the first
site to work with medical societies and specialty boards to
verify doctor eligibility and ensure no-nonsense access by
doctors without having to have the patient conscious or the
family present.
3. A Universal System For Patients and Doctors.
Physicians and patients want a universal system that is fast
to enter, fast to use, accurate, and reliable. Our
competitors are more interested in advertising money and
alliances with companies, networks, and newspapers. Our focus
is to help the patient get information easily and quickly,
and help the doctors get the necessary information in a
moment's notice.
4. The Rebate Program.
Through our "Dr. E-MED Rebate Program," we will split our
fees with companies and organizations that refer people to
our program. Every referral that becomes a member of
IDMedical.com will earn the referring company or organization
$5.00 for the first year, with an additional $2.00 for each
year the person renews their membership.
5. Easy Access By Doctors To The System.
Once permission is granted by the patient, there is no need
for registered doctors to have the patient's User ID and
password to enter the system. The doctor can enter the system
knowing only the patient's name and social security number.
Therefore, our system can be used as an out-of-office patient
care system while the competition's systems cannot.
6. Storage of Required Preventative Health Information.
Many elementary and secondary schools, as well as colleges,
require students and teachers to have a record of their
immunizations. These records usually include measles, mumps,
rubella, diptheria, tetanus, pertussis, and polio, as well as
the results of their last TB skin test. This type of
information can be stored on the IDMedical.com web site for a
person to conveniently access or print. Health care providers
could also review or edit this information as new
vaccinations are given.
IDMedical feels that it has a window of opportunity to develop and exploit this
application. However, we believe the principal competitive factors in our
market are name recognition, selection, personalized services, convenience,
price, accessibility, quality of site content, reliability, and speed of
fulfillment. Our number one corporate objective is to have IDMedical.com become
a household name when people think of their medical records.
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There can be no assurance that we will be able to successfully compete against
current and future competitors. Many of our current and potential competitors
have longer operating histories, larger customer bases, and greater product
recognition than we do. They also have significantly greater financial and
marketing resources. Some of our competitors may be able to devote greater
resources to marketing and promotional campaigns, adopt more aggressive pricing
or availability policies, and devote substantially more resources to web site,
systems development, and marketing than we can. In addition, companies that
control access to transactions through network access or web browsers could
promote our competitors or charge us a substantial fee for inclusion. For more
information about these and other risks associated with industry competition,
see "Risk Factors."
Marketing
The following sectors will be targeted through IDMedical's marketing strategy:
1) Corporate America
We believe every major corporation with traveling employees
or employees on overseas assignments can benefit from our
program. Most corporations will realize that, for a nominal
annual premium, they can provide "information insurance"
that will assist their employees in a medical emergency. In
many cases, the cost of premiums is minimal compared to the
economic cost associated with the loss or disability of one
or more employees due to slow or incorrect medical
information.
2) Non Profit Organizations (NPOs)
Confronted with the task of annual solicitation,
IDMedical.com could show NPOs an innovative way of raising
money. Through our "Dr. E-MED Rebate program," every referral
from a NPO will earn the organization a $5.00 rebate. This
would provide a recurring cash flow for the NPO. University
Alumni Associations will be specifically targeted for the
"Dr. E-MED Rebate program." The alumni populations are well
educated and computer literate, which could result in strong
enrollment for IDMedical.com.
3) Major Associations/Organizations
IDMedical.com will target associations and organizations that
have a large member population, such as the American Society
of Retired Persons (AARP). IDMedical.com will target this
association as a number one candidate for our products and
services. Our aging society has more citizens traveling
during their golden years. IDMedical.com can provide a
valuable service for these members by having their medical
records available on the Internet. In addition, these
associations or organizations can receive substantial
financial reward for their participation through the "Dr.
E-MED Rebate program."
4) Major Insurance Companies
IDMedical.com will target larger insurance companies, such as
CIGNA, Prudential, Blue Cross and Blue Shield, to encourage
their members' participation in our program. These companies
can promote the program as a form of "information insurance"
to assist their members in receiving the proper medical care.
In addition to keeping the medical costs down for the
treatment of their members, these companies will also receive
a $5.00 rebate for signing up their members.
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5) The General Public
IDMedical.com will directly market to the general public via
the Internet and general advertising. Strategic relationships
will be aggressively pursued with major Internet companies.
This will include alliances and marketing agreements ("Dr.
E-MED" Rebate Program") with Internet providers. Initially,
IDMedical.com will initially target a specific geographical
area in the Northeast specifically focusing on the tri-state
area of New York, New Jersey, and Pennsylvania. Advertising
will be in the form of newspaper, TV, and radio ads. There
will also be some direct mail-outs to selected areas.
6) Strategic Alliances with Businesses and Organizations
There are many businesses and organizations, both large and
small, whose employees, customers, members and attendees
could benefit from the services of IDMedical.com. Strategic
alliances will be formed with these entities, giving them an
incentive through the "Dr. E-MED Rebate program" to make
their employees, customers and members aware of the services
of IDMedical.com.
7) Special Interest Consumer Markets
IDMedical.com will target five specific special interest
consumer markets through the Internet: African-Americans,
Hispanics, Asian-Americans, College Students and the Gay and
Lesbian Population. These groups were selected based on
criteria such as Internet usage and buying power.
Our approach will be to do banner advertising on web sites
catering to these groups. Payment for these ads will be
through cash or the "Dr. E-MED Rebate program," where the
host web site will receive $5.00 for every person who enrolls
in IDMedical.com.
10) Strategic Medical Alliances
IDMedical.com's growth philosophy will target medical
societies whose members are physicians. These societies cross
all types of medicine and represent a prestigious affiliation
for us. We intend to pursue a multi-faceted relationship that
includes physician verification and banner advertising,
creating a win-win scenario for both parties. Examples of
medical societies that will be approached are the American
College of Surgeons and the Royal Society of Medicine.
11) Travel Industry
The travel industry is a tremendous growth opportunity for
IDMedical.com. People who travel are most likely to be aware
of unexpected or emergency medical needs that might arise
when out of town. We plan to target major travel agencies,
airlines, and publications such as FODOR's.
12) Cable Networks
There are two cable channels that currently provide health
subjects 24 hours a day. They are the "Discovery Health
Network" (owned by the Discovery Channel) and "The Health
Network" (owned by FOX). These cable companies could provide
IDMedical.com a platform for national media exposure. With
the "Dr. e-MD Rebate program," substantial monetary
enticements should encourage these cable networks to
advertise our service.
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13) Institutions which Maintain Immunization Records
Our web site allows for the maintenance of routine
immunization records, as well as TB skin test records. This
will let us market our product to school systems,
universities, camps, and work places that require mandatory
submission of this information. IDMedical can establish
alliances with these entities that will benefit both parties.
The school systems will require their members to enter their
immunization records, as well as other emergency medical
information, on IDMedical.com. In return, IDMedical will give
these entities $5.00 for each person that initially joins our
program.
The ability to store routine medical records expands the
market of potential users of our web site to all ages,
including people who don't have a history of any medical
problems.
Hardware, Software and Future Web Site Design
IDMedical.com's commitment is to continuously improve and upgrade our web site
and computer platform within budgetary constraints. It is our intent to develop
a hardware platform that will be upgradeable and expandable. Our initial
development platform will have minimal cost and basic security. The next step
is for us to move to a heavy usage platform with advanced security. Future
financing will enable us to move to our next objective, a platform which will
allow for extreme usage, with maximum security.
IDMedical.com has retained digitalNATION -- a VERIO Company, Inc., to provide
our dedicated server and co-location services. VERIO is a leading provider of
comprehensive business Internet services, with an emphasis on serving small and
mid-sized business markets. VERIO offers customers a broad range of Internet
solutions, including high-speed access, Web hosting, e-commerce, virtual
private networks, and other enhanced services. VERIO supports its operations
with highly reliable and scalable national infrastructure and systems including
a facilities-based Tier One national network.
On October 12, 1999, INTEL Corp. announced plans to market its authentication
services for a fee to healthcare Web firms. This technology will offer "online
credentials" to physicians providing a means to authenticate the identity of
doctors seeking to access health data in cyberspace. The American Medical
Association (AMA) will issue each doctor an INTEL created AMA "digital
credential". We feel this break-through technology will provide the security
and assurance our members need. In other words, members will know that their
medical information is only going to be viewed by healthcare providers. We
intend to approach INTEL concerning the use of this technology.
Future Products and Services
Our primary service will be our on-line interactive web site for developing,
storing, and accessing medical records on the Internet. However, we plan on
taking this software to the next level so it can be used at home as a
stand-alone program on the customer's PC. This program will be developed to run
on Microsoft Windows and will be sold on floppy disks, CDs, and DVDs. Once the
customer develops his medical record, he can either load the data onto our web
site or keep it for his own records, sharing it with his healthcare providers
as needed.
Another product to be developed from our on-line program is a software program
that will allow physicians to store and retrieve their patients' medical
records electronically from their offices. This product will be developed for
Microsoft Windows and will run on PCs and PC networks. The software will be
sold on floppy disks, CDs, and DVDs. This program will be capable of inputting
and storing medical records for an entire practice. Every physician in the
practice will be able to access patient medical records from multiple
locations, including their homes. This application has the potential to replace
current filing systems, including spacious paper files.
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Many schools and work places are required to keep track of important medical
information, such as:
o Immunization record.
o Date of last TB skin test.
o Blood type.
o Hepatitis vaccinations schedule.
o Drug allergies.
o Personal physician information
A software program could be used to consolidate this information, allowing
schools and employers to keep the necessary medical records on file in their
medical departments. This program could be sold in CD-ROM and disk format, and
could also be downloaded from our web site for a fee.
For work place and occupational medicine situations, OSHA requires certain
industries to keep track of medical information. Examples of this information
include date of last physical examination, chest X-rays and results, mandated
spirometry test results, heavy metal and lead screen results, and hearing and
vision test results. This data would not be maintained on the Internet.
Instead, it would be kept on a central computer maintained by the employer.
Privacy Policy
All medical information inputted by the customer is sent in an encrypted format
designed to keep unauthorized persons from retrieving it. The information is
stored on a secure server dedicated to IDMedical.com. IDMedical will keep the
customer's information confidential and will not share it with anyone other
than an authorized healthcare provider. Our privacy policy is based upon the
following commitment to our members:
o All medical records are protected by a multi-level access and
security system using our own server. All data will be
encrypted.
o Our members' medical records may only be accessed by that
member, their physician, or an authorized healthcare
provider. The member's username and password must be entered
to gain access to their file.
o Authorization of attending physicians will be through a
professional web site or through the new INTEL/AMA "digital
credential".
o We will have the ability to electronically verify and check
anyone who accesses our members' files. We will prosecute or
revoke the privileges of anyone who tries to violate the
security of our system.
It is our belief that members' privacy, protection, and personal control and
ownership of their files are a top priority. A member can request to have their
files deleted from IDMedical.com at any time. We will comply with such a
request and completely delete the file from our database. In short, we do not
control our members' medical records; our members do.
Employees
IDMedical currently has six full-time employees. We anticipate that we will
hire two additional full-time employees in the next year, as well as a number
of part-time employees. This group will consist of professional, technical, and
support personnel.
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INTELLECTUAL PROPERTY
Patent and Trade Secret Protection
We will use one or more proprietary business processes and software
applications to conduct our business on the Internet. We intend to protect our
business processes and software applications through applicable patent laws, to
the extent such protection is available. If patent protection is unavailable,
we will aggressively protect our business processes by establishing appropriate
trade secret mechanisms including confidentiality provisions in the contracts
of our employees, consultants, and business partners. We will also establish
appropriate procedures to ensure that only those individuals with a "need to
know" receive disclosure of any aspect of our business processes. Also, we are
investigating whether patent laws may protect certain aspects of our
proprietary software. If so, we intend to pursue appropriate claims for such
protection.
Trademarks and Service Marks
We have filed applications with the United States Patent and Trademark Office
to register the following as service marks:
1. The name IDMedical.com,
2. The proprietary character, "Dr. E-MED," as a logo, and
3. The character's name, "Dr. E-MED," as a word mark or "Dr.
E.Z.MED" as an alternative word mark.
While we intend to use these marks to identify our products and services in
various aspects of our overall marketing and sales program, their registration
is not yet completed. If these marks become registered, we intend to
aggressively police and protect them in the United States. If any of the marks
fail to qualify for registration, we will decide whether to continue using the
unregistered mark or to select an alternative mark. Additionally, we will
pursue registration of these marks in the appropriate foreign jurisdictions if
we later decide to conduct business outside the United States. We will also
seek registration of one or more of the previous marks, or one or more
different marks, as trademarks for use in connection with subsequent product
offerings.
Copyrights
IDMedical has entered into agreements with the software developer, the web site
designer, and the graphic artist selected to develop and design our interactive
web site and proprietary software. We believe these agreements are sufficient
to confer upon IDMedical all rights, title, and interest in and to the
intellectual property and other proprietary rights regarding our web site and
related software. These agreements include rights of indemnification of
IDMedical against, among other things, third-party claims of infringement and
misappropriation of third-party rights.
We intend, prior to activating our web site and engaging in business, to
maximize the legal protection of these rights. We have filed applications for
registration of the "Dr. E-MED" character and all copyrightable aspects of our
web site with the United States Copyright Office. We further intend, on an
ongoing and regular basis, to update our filings with the Copyright Office as
new content, art, and other copyrightable works are added to its web site. We
are also evaluating whether any aspects of our proprietary software are
copyrightable. If so, we will attempt to register such copyrightable aspects of
our software with the Copyright Office.
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INTERNET POLICIES
Consumer Issues
We are sensitive to the unique operating characteristics of the Internet,
particularly with respect to consumer concerns regarding privacy issues and
truth in advertising. Accordingly, we intend to regularly review our policies
and processes to ensure the confidentiality and limited use of information
collected by IDMedical. These processes include the use of technology to
minimize any inadvertent disclosure of, or access to, information by third
parties with whom we may have business-to-business relationships (such as any
host site) or wholly unrelated third parties. We also intend to keep abreast
of, and comply with, applicable laws relating to:
o the collection, use, and dissemination of consumer
information; and
o the content and presentation of on-line, broadcast media, and
other marketing and advertising directed at consumers.
We also recognize the need to ensure adequate handling of on-line customer
relationship issues, including contracting and credit card authorization
procedures. Accordingly, we post a customer contract, contracting procedures,
and disclaimers on our web site. These are intended to ensure binding contracts
and eliminate or minimize liability and credit card chargebacks. We will
regularly review our procedures, on-line contracts, disclaimers, and relations
with credit card transaction service providers to guarantee good customer
relations.
Certain Business-to-Business Relationships
In addition to conventional media advertising, we intend to advertise on the
Internet through one or more Internet Service Providers. In negotiating with
these providers, we intend to achieve maximum efficiency in marketing to
Internet consumers by negotiating an appropriate fee mechanism with the service
provider(s).
In our Internet marketing, advertising and consumer information efforts, we are
sensitive to the need to avoid potential liability to third parties for, among
other things, inadvertent infringement of the intellectual property rights of
third parties. Accordingly, we intend to minimize our potential liability by,
among other things, negotiating appropriate indemnification provisions with
contracting third parties and by adopting appropriate policies and procedures
regarding the removal of allegedly defamatory, infringing, or otherwise
inappropriate materials from our web site.
We may be deemed a "service provider" within the meaning of the federal Digital
Millennium Copyright Act ("DMCA"). If so, we intend to take advantage of the
DMCA provisions whenever possible and practicable. These provisions will help
minimize potential liability under the federal Copyright Act for allegedly
infringing material posted on, or accessed through, our web site.
In all of our business-to business relationships, we are aware that the
Internet and related technology are both unique and dynamic in nature. For this
reason, we believe that potential disputes with third parties may represent
potential opportunities to enhance our business prospects. Accordingly, it will
be our continuing policy to evaluate any Internet-related disputes with third
parties in the context of the potential, if any, for mutual enhancement of the
business of each disputing party. We believe such a policy is crucial to
avoiding expensive litigation, which might be rendered moot by advancing
technology.
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Internet Taxation
A number of legislative proposals have been made at the federal, state and
local level, and by foreign governments, that would impose additional taxes on
the sale of goods and services over the Internet. Certain states have also
taken measures to tax Internet-related activities. Although Congress recently
placed a three-year moratorium on state and local taxes on Internet access or
on discriminatory taxes on electronic commerce, existing state and local laws
were expressly excepted from this moratorium. Further, once this moratorium is
lifted, some type of federal and/or state taxes may be imposed upon Internet
commerce. Such legislation or other attempts at regulating commerce over the
Internet may substantially impair the growth of Internet commerce. This would
adversely affect our opportunity to derive financial benefit from such
activities.
Domain Names
While a domain name is technically the user's Internet "address," it also
serves as part of the user's identity. For this reason, we have registered the
domain names IDMedical.net and IDMedical.org. to prevent third party
registration and use of our name on the Internet. Domain names have been the
subject of significant trademark litigation in the United States. Third parties
may bring claims for infringement against us for the use of our domain name or
in respect of our .net and .org registrations.
The current system for registering, allocating, and managing domain names has
been the subject of both litigation and proposed regulatory reform. As a
result, there can be no assurance that our domain names will retain their
value. Therefore, we may have to obtain new domain names in addition to or in
lieu of our current domain names if such litigation or reform efforts result in
a restructuring in the current system.
Jurisdiction
The Internet has a global reach. It is possible that, although our
transmissions over the Internet originate primarily in the State of Colorado,
other state and foreign governments might attempt to regulate Internet activity
and our transmissions or take action against us for violations of their laws.
Violations of such laws may be alleged or charged by state or foreign
governments. In addition, such laws may be modified, or new laws enacted, in
the future. Any of the foregoing could have a material adverse effect on our
business, operational results, and financial condition.
Compliance with Applicable Laws
We intend to keep abreast of legal developments regulating the business conduct
on the Internet so as to ensure continuing compliance with applicable laws.
LEGAL PROCEEDINGS
We are not a party to any current or pending legal proceedings.
DESCRIPTION OF PROPERTY
We do not own any real estate. Our current headquarters consist of
approximately 1,500 square feet of rented office space in Dover, Delaware. We
also maintain administrative offices in 200 square feet of rented office space
in Boulder, Colorado.
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<PAGE> 26
MARKET FOR COMMON STOCK AND RELATED SHAREHOLDER MATTERS
(a) Market Information
There is currently no market for our stock and there never has been.
(b) Holders
As of September 27, 2000, there were 82 holders of record of our common stock.
(c) Dividends
We have paid no cash dividends on our common stock and management does not
anticipate that such dividends will be paid in the foreseeable future.
PLAN OF OPERATION
As a development stage company, we had minimal revenues ($55) from our
inception in June 1999 through July 30, 2000. To date, we have relied on
capital contributions from our management and proceeds from our private
placement offering to fund operations.
Presently, management projects that our cash requirements over the next twelve
months will be approximately $600,000. Management believes we can satisfy our
cash requirements until approximately October, 2001. After that time, we will
either need to raise additional funds or realize additional revenue from our
business activities to meet our cash requirements. There can be no guarantee
that we will be successful in securing additional financing should the need
arise.
Although no assurances can be given, management believes that, based on
statistical data and the amount of interest generated during our test-marketing
period, revenue from future operating activities will be sufficient to meet
some or all of our projected cash needs over the next twelve months. At a
minimum, management believes revenues should help partially offset our cash
requirements, thus reducing the amount of additional funds we would need to
raise.
We are not in the manufacturing business and do not expect to make any capital
purchases of a plant or significant equipment in the next twelve months.
During the next twelve months, we expect to hire additional employees to
implement our plan of operation and business strategies. We anticipate hiring
three full-time employees, with any remaining employees being part-time,
including professional, technical, and support personnel.
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<PAGE> 27
DIRECTORS AND EXECUTIVE OFFICERS
DIRECTORS OF THE COMPANY
We have a board of directors comprised of four members. Each director holds
office until the next annual shareholder meeting or until a successor is
elected or appointed. The members of our board of directors are:
<TABLE>
<CAPTION>
Director of
Directors Age Company Since
--------- --- -------------
<S> <C> <C>
Dr. Richard J. Schaller, Sr. 59 June, 1999
Neil A. Cox 51 June, 1999
Dr. Richard J. Schaller, Jr. 35 June, 1999
Dr. Vincent E. Schaller 34 June, 1999
</TABLE>
DR. RICHARD J. SCHALLER, SR. earned his Ph.D. in Engineering from Drexel
University in 1971. He worked in various engineering and management positions
for several Fortune 500 companies, including Westinghouse Electric Corp. and
Air Products & Chemicals. His most recent work experience was primarily in the
Information Technology area, where he applied computer hardware and software to
solve industrial problems. In 1993 Dr. Schaller founded the S&L Group, which
applied computer systems for electronic billing to insurance companies for
medical claims. From 1996 to the present, Dr. Schaller served as President of
Apex Affiliates Inc., a consulting organization.
NEIL A. COX graduated from West Texas State University with a B.B.A. From 1971
to 1974 he served as a First Lieutenant in the United States Army. From 1974 to
the present, Mr. Cox worked as a registered stockbroker at Rocky Mountain
Securities and Investments, Inc., located in Denver, Colorado. He has also
worked as an independent insurance broker. He is currently a director of Rocky
Mountain Securities and Investments, Inc. In accordance with Article III,
Section 40 of the National Association of Securities Dealers, Inc.'s Rules of
Fair Practice regarding outside business activities, Rocky Mountain Securities
& Investments, Inc. has no relationship or affiliation with the IDMedical or
IDMedical's proposed operations.
DR. RICHARD J. SCHALLER, JR. graduated from Muhlenberg College in 1986 with a
BS in Biology and Natural Science. He graduated from Penn State University
College of Medicine with a Medical Degree in 1990. He graduated from the
Eastern Virginia Graduate School of Medicine Residency in 1994, where he served
as Chief Resident from 1993 to 1994. Since 1994, Dr. Schaller has practiced as
an emergency physician at Memorial Hospital of Burlington County in Mount
Holly, New Jersey, as well as Overlook Hospital in Summit, New Jersey. Dr.
Schaller is a medical director of Complete Care Inc., a multi-disciplinary
medical practice located in Scotch Plains, New Jersey. He is currently a
clinical instructor of emergency medicine with the University of Medicine and
Dentistry of New Jersey. In 1994, Dr. Schaller was given the only award for
"Clinical Excellence in Emergency Medicine" by the EMRA (Emergency Medicine
Residents Association). He was selected for this national award from 3,000
resident doctors nationwide.
DR. VINCENT SCHALLER graduated Phi Beta Kappa from Muhlenberg College with a BS
in Biology and Natural Sciences. He graduated AOA in 1993 from the Milton S.
Hershey Medical Center at Penn State University College of Medicine in Hershey,
Pennsylvania. In 1996, Dr. Schaller completed his internship and residency
training in Family Practice at the Hunterdon Medical Center in Flemington, New
Jersey. Dr. Schaller is Board Certified in Family Practice with full staff
privileges at the Kent General Hospital campus of the Bayhealth Medical Center
in Dover, Delaware. His inpatient and outpatient privileges include the NICU,
nursery, pediatrics, general medicine, intensive care, and cardiac care. Dr.
Schaller is a partner in private practice at Dover Family Physicians PA in
Dover, Delaware. He is also the Chairman of the Cancer Research Committee for
Delaware State University and the Bayhealth Medical Center, and is serving on
the Regional Board of Directors for the American Cancer Society.
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<PAGE> 28
EXECUTIVE OFFICERS OF THE COMPANY
Our executive officers and their respective positions are as follows:
o Richard J. Schaller, Sr., a director, has served as President
since June 1999.
o Neil A. Cox, a director, has served as Vice President,
Treasurer and Secretary since June 1999.
SIGNIFICANT EMPLOYEES OF THE COMPANY
In August, 2000, we appointed Phillip Gatto as our Chief Technical Officer. Mr.
Gatto, 61, graduated from Pennsylvania Military College with a BS in Electrical
Engineering. He also completed advanced degree work at Drexel University and
the University of Corpus Christi. Mr. Gatto began his career as a systems
engineer for the U.S. Navy, overseeing the installation of tactical data
systems on numerous ships. He then worked as a computer systems design engineer
for NASA at the Goddard Space Flight Center. From 1975 to 1982, Mr. Gatto was a
regional sales manager for Honeywell Information Systems and a marketing
manager for AT&T. In 1982, he started working as the director of national
accounts operation for Amperif Corporation. While at Amperif, Mr. Gatto was
responsible for servicing the AT&T and Bell Operating Companies' national
accounts. From 1986 to 1996, Mr. Gatto worked as Principal for Business
Procurement Inc. (BPI). While at BPI, he was in charge of the company's
finances and oversaw the implementation of various computer networks. From 1996
to the present, Mr. Gatto served as Director of Business Development for
Business Technology Center (BTC) at West Chester University. His duties at BTC
include securing business relationships for the company, designing the
company's web site, and serving as a project manager on several key projects.
We have no other significant employees.
FAMILY RELATIONSHIPS
Richard J. Schaller, Sr., President and director of IDMedical, is the father of
Dr. Richard J. Schaller Jr. and Dr. Vincent E. Schaller, both directors.
Neil A. Cox, our Vice President, Treasurer, Secretary, and a director, is the
brother-in-law of Richard J. Schaller, Sr.
OWNERSHIP OF SECURITIES BY BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of September 20, 2000, the stock ownership
of each person known by us to be the beneficial owner of 5% or more of our
common stock, each executive officer and director individually, and all
executive officers and directors as a group. No other class of voting
securities is outstanding. Each person is believed to have sole voting and
investment power over the shares, except as noted.
<TABLE>
<CAPTION>
Amount and Nature of
Name and Address of Beneficial Owner (1) Beneficial Ownership (1) Percent of Class (2)
---------------------------------------- ------------------------ --------------------
<S> <C> <C>
Richard J. Schaller, Sr. (3) 1,850,000 18.63%
Neil A. Cox 1,839,000 18.52%
Dr. Richard J. Schaller, Jr. (3) 1,850,000 18.63%
Dr. Vincent E. Schaller (3) 1,850,000 18.63%
Includes all officers and directors of the 7,389,000 74.40%
Company as a group (4 persons)
</TABLE>
26
<PAGE> 29
----------
(1) Unless otherwise indicated, all shares are beneficially owned by the
persons named. The address of each person is 4333 N. 30th Street,
Boulder, Colorado 80301.
(2) Based upon 9,931,500 shares outstanding at October 2, 2000, plus the
amount of shares each person or group has the right to acquire within
60 days pursuant to options, warrants, rights, conversion privileges,
or similar obligations.
(3) Richard J. Schaller, Sr. is the father of Dr. Richard J. Schaller, Jr.
and Dr. Vincent E. Schaller. Each would be deemed to have beneficial
ownership of the shares owned by the other two. For purposes of this
chart, however, their ownership is indicated individually.
EXECUTIVE COMPENSATION
The following information discloses all plan and non-plan compensation awarded
to, earned by, or paid to our Chief Executive Officer and each of the four
highest paid executive officers of IDMedical.
SUMMARY COMPENSATION TABLE
We did not pay or accrue any compensation to or for our Chief Executive Officer
or any other executive officers of IDMedical during the fiscal year ended
December 31, 1999. This table has therefore been omitted.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
This table has been omitted, as we did not grant any stock options or stock
appreciation rights during 1999.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION/SAR VALUES
This table has been omitted, as no stock options were exercised during fiscal
year 1999.
LONG-TERM INCENTIVE PLANS ("LTIP") -- AWARDS IN LAST FISCAL YEAR
This table has been omitted, as no executive officers received awards pursuant
to any LTIP during fiscal year 1999.
COMPENSATION OF DIRECTORS
We did not pay any compensation to our directors for service provided as a
director during fiscal year 1999. There are no formal or informal
understandings or arrangements relating to compensation. However, directors may
be reimbursed for all reasonable expenses incurred by them in conducting our
business. These expenses include out-of-pocket expenses for such items as
travel, telephone, postage, and Federal Express charges.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT, AND CHANGE-IN-CONTROL
ARRANGEMENTS
Our board of directors has complete discretion as to the appropriateness of:
(a) key-man life insurance;
(b) officer and director liability insurance;
(c) employment contracts with and compensation of executive
officers and directors;
(d) indemnification contracts; and
(e) incentive plans to award executive officers and key
employees.
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<PAGE> 30
Our board of directors is responsible for reviewing and determining the annual
salary and other compensation of our executive officers and key employees. Our
goals are to align compensation with business objectives and performance and to
enable us to attract, retain, and reward executive officers and other key
employees who contribute to the long-term success of IDMedical. In the future,
executive compensation may include, without limitation, cash bonuses, stock
option grants, and stock reward grants. In addition, we may institute a pension
plan or similar retirement plans.
EMPLOYEE BENEFIT AND CONSULTING SERVICES COMPENSATION PLANS
We currently have in effect one Employee Benefit and Consulting Services
Compensation Plan, known as the 1999 IDMedical.com, Inc. Stock Option Plan. The
plan covers 1,312,000 shares of common stock, none of which have been
registered. Under this plan, a total of 250,000 options to purchase common
stock at $0.10 per share and 145,000 options to purchase common stock at $1.10
have been granted to date. Of this amount, 61,000 options have been exercised.
Under the plan, we may issue shares of common stock and/or grant options to
purchase common stock to qualified consultants, advisors, officers, directors,
and employees of IDMedical. The purpose of the plan is to promote the best
interests of IDMedical and its stockholders by providing a means of non-cash
remuneration to eligible participants who contribute to the operating progress
of the Company. The plan is administered by our board of directors or a
committee thereof which has the discretion to determine from time to time:
o the eligible participants to receive an award;
o the number of shares of stock issuable directly or to be
granted pursuant to option;
o the price at which the option may be exercised or the price
per share in cash, cancellation of fees, or other payment for
which we are liable if a direct issue of stock; and
o all other terms on which each option will be granted.
The total number of shares of common stock reserved for issuance under this
plan may be increased only by a resolution of the board of directors and an
amendment to the plan. Additional shares reserved for the plan will be either
authorized and unissued common stock or reacquired common stock.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND ORGANIZATION OVER THE LAST
FIVE YEARS
Our founders are Richard J. Schaller Sr., President and Director; Neil A. Cox,
Vice President, Secretary, Treasurer and Director; Dr. Richard J. Schaller Jr.,
Director; and Dr. Vincent E. Schaller, Director. On June 28, 1999 each founder
was issued 1,850,000 shares of our common stock for their capital contribution
of $12,500 each.
28
<PAGE> 31
SELLING SECURITYHOLDERS
The following table sets forth the names of the selling securityholders, the
number of shares of common stock beneficially owned by each selling
securityholder as of October 2, 2000, the maximum number of shares that each
may offer, and the number of shares of common stock beneficially owned by each
selling securityholder upon completion of the offering, assuming all of the
shares are sold. The number of shares sold by each selling securityholder may
depend upon a number of factors, including the market price of the common
stock. None of the selling securityholders has, or within the past three years
has had, any position, office, or other material relationship with us.
<TABLE>
<CAPTION>
SHARES
MAXIMUM BENEFICIALLY
SHARES SHARES OWNED AFTER
BENEFICIALLY OFFERED IN OFFERING
NAME OF SELLING OWNED PRIOR OFFERING -----------------------
SECURITYHOLDER TO OFFERING (1) NUMBER NUMBER PERCENT
-------------- -------------- ----------- ------- -------
<S> <C> <C> <C> <C>
John and Christine L. Acampora 10,000 10,000 0 0
Salvatore and Angela Accordino 5,000 5,000 0 0
Alliance Financial Network, Inc. (2) 775,000(3) 775,000(3) 0 0
Karen and Paul Aubrey 1,000 1,000 0 0
Augustine Fund, LP 500,000 500,000 0 0
David P. Bascelli 28,500(4) 3,500 25,000 *
William C. Bossung (2) 775,000(5) 775,000(5) 0 0
Donald S. Calahan 1,000 1,000 0 0
Robert Cooper 1,000 1,000 0 0
Alan L. Cox 1,000 1,000 0 0
Andrea M. Cox 1,000 1,000 0 0
Cara G. Cox 1,000 1,000 0 0
Carol A. Cox 1,000 1,000 0 0
Christopher A. Cox 1,000 1,000 0 0
Gary I. Cox 1,000 1,000 0 0
Gregory I. Cox 1,000 1,000 0 0
Jonathan L. Cox 1,000 1,000 0 0
Patrick A. Cox 1,000 1,000 0 0
Leonard S. Cutler 5,000 5,000 0 0
Richard Cutler and Susan Leon 5,000 5,000 0 0
Frank P. and Dolores Cymbala 1,000 1,000 0 0
Devenshire Management Corporation 1,550,000(6) 1,550,000(6) 0 0
Antoinette M. Du Biel 10,000 10,000 0 0
Edward Du Biel 10,000 10,000 0 0
Marie Antoinette Du Biel 1,000 1,000 0 0
Douglas F. Fleet 10,000 10,000 0 0
Futro & Associates, P.C 250,000 250,000 0 0
George G. Andrews Revocable Trust -
George G. Andrews - Trustee 3,000 3,000 0 0
Rosemarie B. Greco 50,000 50,000 0 0
Mark and Ellen Harris 2,500 2,500 0 0
John N. Harris 215,000 215,000 0 0
Ken Heng 20,000 20,000 0 0
Denise E. Hollis 1,000 1,000 0 0
Howard E. Hudson, Jr 25,000 25,000 0 0
Humane Society of Boulder Valley 1,000 1,000 0 0
JAKL Company 2,000 2,000 0 0
J. Paul Consulting Corp. 5,000 5,000 0 0
Paul J. Kaitz 2,500 2,500 0 0
Michael and Donna Klein 50,000 50,000 0 0
Joseph E. Kovarik 3,000 3,000 0 0
</TABLE>
29
<PAGE> 32
<TABLE>
<CAPTION>
SHARES
MAXIMUM BENEFICIALLY
SHARES SHARES OWNED AFTER
BENEFICIALLY OFFERED IN OFFERING
NAME OF SELLING OWNED PRIOR OFFERING ---------------------
SECURITYHOLDER TO OFFERING (1) NUMBER NUMBER PERCENT
-------------- --------------- ------- ------ -------
<S> <C> <C> <C> <C>
Richard C. Kuesan 3,000 3,000 0 0
Edward A. Kurek III and Lisa Kurek 3,000 3,000 0 0
Mark Ladzinski 5,000 5,000 0 0
Colin Milner 2,000 2,000 0 0
David and Theresa Moitozo 10,000 10,000 0 0
Juan Antonio Moran 1,000 1,000 0 0
Marsha Jean Murphy 1,000 1,000 0 0
Elizabeth A. O'Donnel 1,000 1,000 0 0
Brad M. Pacella 10,000 10,000 0 0
Deborah E. Pacella 50,000 50,000 0 0
Gerald M. and Doris L. Pacella 10,000 10,000 0 0
Gerald R. Pacella 50,000 50,000 0 0
Marc A. Pacella 10,000 10,000 0 0
Vaughn Paul 3,000 3,000 0 0
Patricia H. Plath 3,000 3,000 0 0
Michael D. Rogers 9,000 9,000 0 0
Allen J. and Randi S. Salm 15,000 15,000 0 0
Laurence A. Shadek 25,000 25,000 0 0
Anne M. Sieg 2,000 2,000 0 0
Audrey J. Smith 1,000 1,000 0 0
Paul E. Soll 125,000 125,000 0 0
St. Mary Magdalene Episcopal Church 1,000 1,000 0 0
Stagecoach Company 1,000 1,000 0 0
Dale Stonedahl 1,000 1,000 0 0
Tammy Stonedahl 1,000 1,000 0 0
Sandra A. Streeter 10,000 10,000 0 0
Ann M. Takahasi-Elliot 1,000 1,000 0 0
James W. Toot 10,000 10,000 0 0
Russel Trier 25,000 25,000 0 0
Mattheos and Efnosini Tsibogoi 16,000 16,000 0 0
Bonnie R. Tuttle 5,000 5,000 0 0
Harold Tuttle 5,000 5,000 0 0
Yucca Flats Company 3,000 3,000 0 0
H. John and Shirley L. Zarra 10,000 10,000 0 0
</TABLE>
* Represents less than one percent
(1) Unless otherwise indicated, each person has sole investment and voting
power with respect to the shares indicated. For purposes of computing
the percentage of outstanding shares held by each selling
securityholder on October 2, 2000, any security that such person has
the right to acquire within 60 days after such date is deemed to be
outstanding for the purpose of computing the percentage ownership for
such person. However, such securities are not deemed to be outstanding
for the purpose of computing the percentage ownership of any other
person.
(2) William C. Bossung is a principal of Alliance Financial Network, Inc.,
and each would be considered to have beneficial ownership of the
shares of the other. For purposes of this table, however, the shares
owned by each are listed separately.
(3) Includes 562,500 shares issuable upon the exercise of warrants, the
exercise of which is not permitted until February, 2001. However,
because the shares of common stock issuable upon exercise for the
warrants are being registered for resale in this registration
statement, these shares are being included in table.
(4) Includes 25,000 shares issuable upon the exercise of options granted
under the 1999 IDMedical.com Stock Option Plan. These options may be
exercised at any time upon payment of the option price.
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<PAGE> 33
(5) Includes 562,500 shares issuable upon the exercise of warrants, the
exercise of which is not permitted until February, 2001. However,
because the shares of common stock issuable upon exercise for the
warrants are being registered for resale in this registration
statement, these shares are being included in table.
(6) Includes 1,125,000 shares issuable upon the exercise of warrants, the
exercise of which is not permitted until February, 2001. However,
because the shares of common stock issuable upon exercise for the
warrants are being registered for resale in this registration
statement, these shares are being included in table.
We are registering the shares for resale by the selling securityholders in
accordance with registration rights granted to the selling securityholders. We
will pay the registration and filing fees, printing expenses, listing fees,
blue sky fees (if any), and fees and disbursements of our counsel in connection
with this offering. However, the selling securityholders will pay any
underwriting discounts, selling commissions, and similar expenses relating to
the sale of the shares, as well as the fees and expenses of their counsel.
In addition, we have agreed to indemnify the selling securityholders,
underwriters who may be selected by the selling securityholders, and certain
affiliated parties against certain liabilities in connection with this
offering, including liabilities under the Securities Act. The selling
securityholders may agree to indemnify any agent, dealer, or broker-dealer that
participates in transactions involving sales of the shares against certain
liabilities, including liabilities under the Securities Act. The selling
securityholders have agreed to indemnify us and our directors and officers, as
well as any person controlling the Company, against certain liabilities,
including liabilities under the Securities Act. Insofar as indemnification for
liabilities under the Securities Act may be permitted to our directors or
officers, or persons controlling the Company, the Company has been informed
that in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
PLAN OF DISTRIBUTION
The selling securityholders may, from time to time, sell all or a portion of
the shares in private transactions, or if a market develops for the common
stock, on the OTC Bulletin Board or elsewhere (in privately negotiated
transactions or otherwise) at fixed prices that may be changed, at market
prices prevailing at the time of sale, at prices related to such market prices,
or at negotiated prices. The shares may be sold by the selling securityholders
by one or more of the following methods, without limitation:
(a) block trades in which a broker or dealer will attempt to sell
the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
(b) purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this
prospectus;
(c) an exchange distribution in accordance with the rules of such
exchange;
(d) ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
(e) privately negotiated transactions;
(f) short sales; and
(g) a combination of any such methods of sale.
In effecting sales, brokers and dealers engaged by the selling securityholders
may arrange for other brokers or dealers to participate. Brokers or dealers may
receive commissions or discounts from the selling securityholders (or, if any
such broker-dealer acts as agent for the purchaser of such shares, from such
purchaser) in amounts to be negotiated that are not expected to exceed those
customary in the types of transactions involved.
Broker-dealers may agree with the selling securityholders to sell a specified
number of shares at a stipulated price per share. If the broker-dealers are
unable to sell these shares while acting as agent for selling securityholders,
they may purchase as principal any unsold shares at the price required to
fulfill their commitment to the selling securityholders. Broker-dealers who
acquire shares as principal may subsequently resell these shares in
transactions (including block transactions and sales to and through other
broker-dealers) in the over-the-counter market or otherwise at prices and on
terms prevailing at the time of sale, at prices related to the then-current
market price, or in negotiated transactions. Broker-dealers may pay to or
receive from the purchasers of such shares commissions in
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<PAGE> 34
connection with such resales (as described above). The selling securityholders
may also sell the shares in accordance with Rule 144 under the Securities Act,
rather than pursuant to this prospectus.
The selling securityholders and any broker-dealers or agents that participate
with the selling securityholders in sales of the shares may be deemed to be
"underwriters" within the meaning of the Securities Act. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
From time to time the selling securityholders may engage in short sales, short
sales against the box, puts and calls, and other transactions in securities of
the Company or derivatives thereof. They may also sell and deliver the shares
in connection with these transactions or in settlement of securities loans.
From time to time the selling securityholders may pledge their shares pursuant
to the margin provisions of the customer agreements with their brokers. Upon
default by the selling securityholders, the brokers may periodically offer and
sell the pledged shares.
We are required to pay all fees and expenses incident to the registration of
the shares. We have agreed to indemnify the selling securityholders against
certain losses, claims, damages, and liabilities, including liabilities under
the Securities Act.
DESCRIPTION OF SECURITIES
CAPITAL STOCK
Our authorized capital stock consists of 100,000,000 shares of common stock,
par value $.001 per share, and 1,000 shares of preferred stock, par value $.001
per share.
COMMON STOCK
There are currently 9,931,500 shares of our common stock outstanding.
Each holder of common stock is entitled to one vote for each share held on all
matters to be voted upon by the shareholders generally. The shares do not have
cumulative voting rights, which means that holders of more than 50% of the
shares of common stock voting for the election of directors can elect all the
directors. In such an event, the holders of the remaining shares would not be
able to elect a single director.
Holders of common stock are entitled to receive pro-rata such dividends, if
any, as may be declared from time to time by the board of directors out of
funds legally available for the payment of dividends. This right is subject to
the rights of any holders of preferred stock. However, we presently intend to
reinvest any earnings instead of paying cash dividends to holders of common
stock. In the event of our liquidation, dissolution, or winding up, the holders
of common stock are entitled to share pro-rata in all assets remaining after
payment of liabilities. Shares of common stock have no preemptive, conversion,
or other subscription rights. There are no redemption or sinking fund
provisions applicable to the common stock.
PREFERRED STOCK
There are currently no shares of our preferred stock outstanding.
Preferred stock may be divided into and issued in one or more series, as may be
determined by the board of directors. Our board of directors is authorized,
without any further action by the shareholders, to determine the following
regarding our preferred stock:
o dividend rates;
o liquidation preferences;
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<PAGE> 35
o redemption provisions;
o sinking fund provisions;
o conversion rights;
o voting rights; and
o other rights, preferences, privileges, and restrictions of
any wholly unissued series of preferred stock and the number
of shares constituting any such series.
In addition, such preferred stock could have other rights, including voting and
economic rights, senior to the common stock. The issuance of such preferred
stock could adversely affect the market value of our common stock. The creation
of one or more series of preferred stock also may have the effect of delaying,
deferring, or preventing a change in control of IDMedical without any action by
shareholders.
WARRANTS
There are 2,250,000 warrants outstanding at this time, held among 3
individuals. Each warrant gives its holder the right to purchase one share of
common stock. Of the warrants, 1,250,000 have an exercise price of $1.10 per
share and 1,000,000 have an exercise price of $2.00 per share. The warrants may
be exercised at any time between February 3, 2001 and February 2, 2005.
In the event of a capital adjustment, reorganization, merger, sale of assets,
or other significant event identified in the warrant agreement, the exercise
price of the warrants will be adjusted so that the holder of the warrants will
be entitled to purchase additional shares of common stock so that:
(i) the total number of shares of common stock the holder is
entitled to purchase, multiplied by
(ii) the adjusted purchase price per share, equals
(iii) the dollar amount of the total number of shares of common
stock the holder was entitled to purchase before adjustment
multiplied by the total purchase price before adjustment.
INDEMNIFICATION DISCLOSURE FOR SECURITIES ACT LIABILITIES
Indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers, and controlling persons under the
Colorado Business Corporation Act, our Articles of Incorporation (as amended)
or Bylaws, or otherwise. However, we have been advised that in the opinion of
the SEC such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
In the event that a claim for indemnification against such liabilities is
asserted by a director, officer, or controlling person in connection with the
securities being registered, we will submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Securities Act. We will be governed by the
final adjudication of this issue. Such action will not be necessary if, in the
opinion of our corporate counsel, controlling precedent has settled the
question.
Our expenses incurred or paid by a director, officer, or controlling person of
IDMedical in the successful defense of any action, suit, or proceeding is not
subject to the public policy limitations on indemnification.
33
<PAGE> 36
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
We have not engaged new accountants and there have been no disagreements with
our accountants regarding matters of accounting or financial disclosure.
LEGAL MATTERS
The validity of the securities offered by the prospectus is being passed upon
for the company by Futro & Trauernicht, LLC, 1401 - 17th Street, 11th Floor,
Denver, CO 80202. Futro and Associates, P.C., a member of Futro & Trauernicht,
LLC, owns 250,000 shares of common stock and is listed as a selling shareholder
in this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
Presently, we are not a reporting company. Therefore, we are not required to
deliver an annual report to our shareholders.
You may request a copy of any information incorporated by reference in this
prospectus, at no cost, by writing or calling us at:
IDMedical.com, INC.
4333 N. 30TH STREET
BOULDER, COLORADO 80301
TELEPHONE: 303/447-8638
34
<PAGE> 37
FINANCIAL STATEMENTS
Our audited financial statements as of December 31, 1999 and as of July 31,
2000 included in this prospectus have been audited by Cordovano and Harvey,
P.C., Denver, Colorado, an independent public accounting firm, as indicated in
its report with respect to these statements. The financial statements are
included herein in reliance upon the authority of Cordovano and Harvey, P.C.,
as experts in accounting, auditing and in giving said reports.
Our Financial Statements and Independent Auditor's Report for the fiscal year
ended December 31, 1999 and for the period ended July 31, 2000 are included.
35
<PAGE> 38
PART II -- INFORMATION NOT REQUIRED IN PROSPECTUS
INDEMNIFICATION OF DIRECTORS AND OFFICERS
INDEMNIFICATION AND LIMITATION OF DIRECTORS' LIABILITY.
Our Bylaws provide that we may indemnify any person, or that person's testator
or intestate successor, made or threatened to be made a party to any action or
proceeding because that person was a director or officer of IDMedical or served
any other corporation in any capacity at our request. Such actions or
proceedings could be domestic or foreign, civil or criminal, judicial or
administrative, or at the federal or state level. Any indemnification provided
by IDMedical will be in the manner and to the extent permitted by law.
Further, we may enter into agreements with certain officers and directors to
indemnify and hold them harmless in the event claims or legal actions are
brought against them due to acts done or decisions made within the authorized
scope of their position with IDMedical. These agreements will provide
indemnification to the maximum extent permitted by law.
The Colorado Business Corporation Act allows us to eliminate the personal
liability of our directors to us or our stockholders for monetary damages
resulting from a breach of the fiduciary duty of loyalty and care as a
director, except for:
(a) circumstances where the director breached his duty of loyalty
to us or our Shareholders;
(b) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
(c) circumstances under which a director votes for or assents to
an unlawful distribution; and
(d) transactions from which the director directly or indirectly
derived an improper personal benefit.
The Colorado Business Corporation Act also states that directors and officers
will not be personally liable for any injury to person or property arising out
of a tort committed by an employee unless:
1. the director or officer was personally involved in the
situation giving rise to the litigation; or
2. the director or officer committed a criminal offense in
connection with the situation.
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Exclusive of underwriting compensation, our estimated expenses in connection
with the issuance and distribution of the securities being registered are:
<TABLE>
<S> <C>
SEC filing fee for Registration Statement $ 1,546
Accounting Fees $ 7,000
Legal Fees and Expenses $40,000
Miscellaneous $10,000
Total: $58,546
</TABLE>
We will pay all of the expenses listed above.
36
<PAGE> 39
RECENT SALES OF UNREGISTERED SECURITIES
A. On June 28, 1999, we sold 5,920,000 shares of our common stock. The
sale was to four officers and directors of the Company and did not
involve an underwriter. The total cash received from this sale was
$40,000.
All purchasers are accredited investors and we believe this private
placement is exempt from registration pursuant to Sections 4(2), 4(6),
and/or Rule 506 of the Securities Act of 1933. The transaction did not
involve a public offering, no sales commissions were paid, and a
restrictive legend was placed on each certificate evidencing the
shares.
B. On June 28, 1999, we sold 850,000 shares of our common stock. The
sale, which did not involve an underwriter, was to William C. Bossung
(212,500 shares), Alliance Financial Network, Inc. (212,500 shares),
and Devenshire Management Corporation (425,000). The sale was for
services rendered to the Company, such services having a collective
value of $5,744.
All purchasers are accredited investors and we believe this private
placement is exempt from registration pursuant to Sections 4(2), 4(6),
and/or Rule 506 of the Securities Act of 1933. The transaction did not
involve a public offering, no sales commissions were paid, and a
restrictive legend was placed on each certificate evidencing the
shares.
C. On June 28, 1999, we sold 250,000 shares of our common stock. The sale
was to Futro & Associates, P.C and did not involve an underwriter. The
sale was for services rendered to the Company, such services having a
collective value of $5,000.
The purchaser is an accredited investor and we believe this private
placement is exempt from registration pursuant to Sections 4(2), 4(6),
and/or Rule 506 of the Securities Act of 1933. The transaction did not
involve a public offering, no sales commissions were paid, and a
restrictive legend was placed on each certificate evidencing the
shares.
D. On June 28, 1999, we sold 250,000 shares of our common stock. The sale
was to two accredited investors and did not involve an underwriter.
The total cash received from this sale was $25,000.
All purchasers are accredited investors and we believe this private
placement is exempt from registration pursuant to Sections 4(2), 4(6),
and/or Rule 506 of the Securities Act of 1933. The transaction did not
involve a public offering, no sales commissions were paid, and a
restrictive legend was placed on each certificate evidencing the
shares.
E. We offered 1,500,000 shares of our common stock through a private
placement which commenced in November 1, 1999 and concluded on
September 18, 2000. The sale did not involve an underwriter and was
made to a group of 53 investors. The total cash received through the
private placement was $1,120,000.
The purchasers consisted of 27 accredited investors, and 26
non-accredited investors. We believe this private placement is exempt
from registration pursuant to Sections 4(2), and/or Rule 506 of the
Securities Act of 1933. The transaction did not involve a public
offering, no sales commissions were paid, and a restrictive legend was
placed on each certificate evidencing the shares.
37
<PAGE> 40
F. In February, 2000, we sold 1,480,000 shares of our common stock. The
sale was to four officers and directors of the Company and did not
involve an underwriter. The total cash received from this sale was
$10,000.
All purchasers are accredited investors and we believe this private
placement is exempt from registration pursuant to Sections 4(2), 4(6),
and/or Rule 506 of the Securities Act of 1933. The transaction did not
involve a public offering, no sales commissions were paid, and a
restrictive legend was placed on each certificate evidencing the
shares.
G. On August 3, 2000, we sold 1,250,000 warrants. Each warrant has an
exercise price of $1.10 and entitles the holder to one share of our
common stock. The warrants may be exercised at any time between
February 3, 2001 and February 2, 2005. The warrants were issued to
William C. Bossung (312,500 warrants), Alliance Financial Network,
Inc. (312,500 warrants), and Devenshire Management Corporation
(625,000 warrants). They were issued for services to be rendered to
the Company, the estimated total value of which is expected to be
$10,000. An underwriter was not involved in this sale.
The purchasers are accredited investors, and we believe that this
private placement is exempt from registration pursuant to Sections
4(2), 4(6) and/or Rule 506 of the Securities Act of 1933. The
transaction did not involve a public offering, no sales commissions
were paid, and a restrictive legend was placed on each certificate
evidencing the shares.
H. On August 3, 2000, we sold 1,000,000 warrants. Each warrant has an
exercise price of $2.00 and entitles the holder to one share of our
common stock. The warrants may be exercised at any time between
February 3, 2001 and February 2, 2005. The warrants were issued to
William C. Bossung (250,000 warrants), Alliance Financial Network,
Inc. (250,000 warrants) and Devenshire Management Corporation (500,000
warrants). They were issued for services to be rendered to the
Company, the estimated total value of which is expected to be $10,000.
An underwriter was not involved in this sale.
The purchasers are accredited investors and we believe this private
placement is exempt from registration pursuant to Sections 4(2), 4(6),
and/or Rule 506 of the Securities Act of 1933. The transaction did not
involve a public offering, no sales commissions were paid, and a
restrictive legend was placed on each certificate evidencing the
shares.
38
<PAGE> 41
EXHIBIT LIST
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
3.1 Articles of Incorporation, as currently in effect. (Filed
herewith).
3.2 Bylaws dated June 28, 1999 and as currently in effect.
(Filed herewith).
5.1 Opinion of Counsel, Futro & Trauernicht, LLC. (Filed
herewith).
10.1 IDMedical.com, Inc. 1999 Stock Option Plan. (Filed herewith).
10.2 Form of Common Stock Purchase Warrant, exercise price $1.10
(Filed herewith).
10.3 Form of Common Stock Purchase Warrant, exercise price $2.00
(Filed herewith).
10.4 Contract with digitalNATION -- a VERIO company -- Inc. for Web
hosting, executed November 10, 1999. (Filed herewith).
23.1 Consent of Futro & Trauernicht, LLC. (Included in Exhibit
5.1).
23.2 Consent of Cordovano & Harvey, P.C. (Filed herewith).
27 Financial Data Schedule. (Filed herewith).
</TABLE>
39
<PAGE> 42
UNDERTAKINGS
(a) We hereby undertake:
(1) 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 which,
individually or together, represent a fundamental change
in the information in the registration statement; and
notwithstanding the forgoing, any increase or decrease
in volume of securities offered (if the total dollar
value of securities offered would not exceed that which
was registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in the volume and price represent no more
than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any additional or changed material
information on the plan of distribution.
(2) For the purpose of determining any liability under the
Securities Act, to treat each post-effective amendment as a
new registration statement of the securities offered, and the
offering of such securities at that time to be the initial
bona fide offering.
(3) To file a post-effective amendment to remove from
registration any of the securities that remain unsold at the
termination of the offering.
40
<PAGE> 43
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing on Form SB-2 and authorized this registration statement
to be signed on its behalf by the undersigned, in the City of Denver, State of
Colorado on October 10, 2000.
IDMedical.com, INC.
By: /s/ RICHARD J. SCHALLER, SR.
-------------------------------------------
Richard J. Schaller, Sr., President and CEO
By: /s/ NEIL A. COX
-------------------------------------------
Neil A. Cox, Treasurer and CFO
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities
and on the dates stated.
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
<S> <C> <C>
/s/ RICHARD J. SCHALLER, SR President and October 10, 2000
------------------------------ Director
Richard J. Schaller, Sr.
/s/ NEIL A. COX Vice President, Secretary, October 10, 2000
------------------------------ Treasurer and Director
Neil A. Cox
/s/ RICHARD J. SCHALLER, JR. Director October 10, 2000
------------------------------
Richard J. Schaller, Jr.
/s/ VINCENT E. SCHALLER Director October 10, 2000
------------------------------
Vincent E. Schaller
</TABLE>
41
<PAGE> 44
IDMEDICAL.COM, INC.
(A DEVELOPMENT STAGE COMPANY
INDEX TO FINANCIAL STATEMENTS)
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent auditors' report...................................................................F-2
Balance sheets, at July 31, 2000 and December 31, 1999.........................................F-3
Statements of operations, for the seven months ended July 31, 2000, for the
period from June 17, 1999 (inception) through December 31, 1999 and
for the period from June 17, 1999 (inception) through July 31, 2000........................F-4
Statement of changes in shareholders' equity from June 17, 1999 (inception)
through July 31, 2000.....................................................................F-5
Statements of cashflows, for the seven months ended July 31, 2000, for the
period from June 17, 1999 (inception) through December 31, 1999 and
for the period from June 17, 1999 (inception) through July 31, 2000........................F-6
Notes to financial statements.................................................................F-7
</TABLE>
F-1
<PAGE> 45
[CORDOVANO AND HARVEY, P.C. LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Board of Directors
IDMEDICAL.COM, Inc.:
We have audited the accompanying balance sheets of IDMEDICAL.COM, Inc. (a
development stage company) as of July 31, 2000 and December 31, 1999, and the
related statements of operations, changes in shareholders' equity, and cash
flows for the seven months ended July 31, 2000, for the period from June 17,
1999 (inception) to December 31, 1999, and the period from June 17, 1999
(inception) to July 31, 2000. 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 IDMEDICAL.COM, Inc. as of July
31, 2000 and December 31, 1999, and the results of its operations and its cash
flows for the seven months ended July 31, 2000, for the period from June 17,
1999 (inception) through December 31, 1999, and the period from June 17, 1999
(inception) to July 31, 2000 in conformity with generally accepted accounting
principles.
Cordovano and Harvey, P.C.
Denver, Colorado
September 8, 2000
F-2
<PAGE> 46
IDMEDICAL.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
<TABLE>
<CAPTION>
July 31, December 31,
2000 1999
----------- ------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents ................................................. $ 846,748 $ 15,558
Prepaid expenses .......................................................... 4,650 --
Employee receivable ....................................................... 6,579 --
----------- -----------
Total current assets ................................................. 857,977 15,558
Property and Equipment, net of accumulated depreciation and amortization of
$1,133 and $-0-, respectively (Notes 1, 2) ............................. 11,745 --
Intangible assets, net of accumulated amortization of $96 and $-0-,
respectively (Notes 1, 2) ............................................... 389 424
Website, net of accumulated amortization of $4,236 and $903,
respectively (Notes 1, 2) ............................................... 23,264 6,597
Other Assets (Notes 1, 2) ................................................. 11,300 18,731
----------- -----------
$ 904,675 $ 41,310
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable, trade ................................................... $ 19,972 $ 15,352
Capital lease payable (Note 2) ............................................ 3,871 --
----------- -----------
Total current liabilities ............................................ 23,843 15,352
Commitments (Note 6) .......................................................... -- --
Shareholders' equity:
Preferred stock, $.001 par value, 1,000 shares
authorized, -0- and -0- shares issued and outstanding, respectively ..... -- --
Common stock, $.001 par value, 100,000,000 shares authorized,
9,788,500 and 8,750,000 shares issued and outstanding, respectively ..... 9,788 7,270
Additional paid-in capital, ............................................... 1,016,896 45,974
Outstanding common stock options .......................................... 380 500
Deficit accumulated during the development stage .......................... (146,232) (27,786)
----------- -----------
Total shareholders' equity ........................................... 880,832 25,958
----------- -----------
$ 904,675 $ 41,310
=========== ===========
</TABLE>
See accompanying notes to financial statements
F-3
<PAGE> 47
IDMEDICAL.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
June 17, 1999 June 17, 1999
(inception) (inception)
For the Seven Through Through
Months Ended December 31, July 31,
July 31, 2000 1999 2000
------------- ------------- -------------
<S> <C> <C> <C>
Revenue ..................................... $ 55 $ -- $ 55
Selling, general and administrative expenses:
Sales and marketing ..................... 6,566 51 6,617
Stock-based compensation, legal ......... -- 5,000 6,244
Stock-based compensation, consulting .... -- 6,244 --
Organization costs ...................... -- 1,000 1,000
Website expense ......................... 1,600 11,083 12,683
Depreciation and amortization ........... 4,562 903 5,465
Personnel ............................... 39,029 -- 39,029
Printing ................................ 15,541 2,342 17,883
Travel .................................. 23,191 -- 23,191
Other ................................... 28,012 1,163 29,175
----------- ----------- -----------
Loss before income taxes ....... (118,446) (27,786) (141,232)
Income taxes (Note 4) ....................... -- -- --
----------- ----------- -----------
Net loss ....................... $ (118,446) $ (27,786) $ (141,232)
=========== =========== ===========
Basic and diluted loss per share ............ $ (0.01) $ *
=========== ===========
Basic and diluted number of
shares outstanding ...................... 9,597,286 9,597,286
=========== ===========
</TABLE>
* Less than $.01 per share
See accompanying notes to financial statements
F-4
<PAGE> 48
IDMEDICAL.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY
<TABLE>
<CAPTION>
Preferred Stock Common Stock
----------------------- -------------------------
Shares Amount Shares Amount
--------- --------- ---------- ----------
<S> <C> <C> <C> <C>
June 17, 1999 (inception) ............................ -- $ -- -- $ --
July 1999 sale of founders stock at
$.0067 per share .................................. -- -- 5,920,000 5,920
July 1999, stock issued for services valued
at the value of the shares of common stock (Note 3) -- -- 1,100,00 1,100
August 1999, sale of common stock at
$.01 per share .................................... -- -- 250,000 250
Grant options to purchase 250,000 shares
of common stock (Note 3) .......................... -- -- -- --
Net loss for the period .............................. -- -- -- --
--------- --------- ---------- ----------
Balance, December 31, 1999 ....... -- -- 7,270,000 7,270
February 2000 sale of founders stock at
$.0067 per share .................................. -- -- 1,480,000 1,480
July 2000, sale of common stock at
$1.00 per share pursuant to private offering,
net of offering costs of $21,180 .................. -- -- 978,500 978
July 2000, exercise of stock options at
$.10 per share, ................................... -- -- 60,000 60
Net loss for the period .............................. -- -- --
--------- --------- ---------- ----------
Balance, July 31, 2000 ....... -- -- $9,788,500 $ 9,788
========= ========= ========== ==========
<CAPTION>
Deficit
Accumulated
Additional Outstanding During the
Paid-in Common Stock Development
Capital Options Stage Total
----------- ------------ ------------ ----------
<S> <C> <C> <C> <C>
June 17, 1999 (inception) ............................ $ -- $ -- $ -- $ --
July 1999 sale of founders stock at
$.0067 per share .................................. 34,080 -- -- 40,000
July 1999, stock issued for services valued
at the value of the shares of common stock (Note 3) 9,644 -- -- 10,744
August 1999, sale of common stock at
$.01 per share .................................... 2,250 -- -- 2,500
Grant options to purchase 250,000 shares
of common stock (Note 3) .......................... -- 500 -- 500
Net loss for the period .............................. -- -- (27,786) (27,786)
---------- ---------- ---------- ----------
Balance, December 31, 1999 ....... 45,974 500 (27,786) 25,958
February 2000 sale of founders stock at
$.0067 per share .................................. 8,520 -- -- 10,000
July 2000, sale of common stock at
$1.00 per share pursuant to private offering,
net of offering costs of $21,180 .................. 956,342 -- -- 957,320
July 2000, exercise of stock options at
$.10 per share, ................................... 6,060 (120) -- 6,000
Net loss for the period .............................. -- -- (118,446) (118,446)
---------- ---------- ---------- ----------
Balance, July 31, 2000 ....... $1,016,896 $ 380 $ (146,232) $ 880,832
========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements
F-5
<PAGE> 49
IDMEDICAL.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
June 17, 1999 June 17, 1999
(inception) (inception)
For the Seven Through Through
Months Ended December 31, July 31,
July 31, 2000 1999 2000
------------- ------------- --------------
<S> <C> <C> <C>
Operating activities:
Net (loss) ....................................... $(118,446) $(27,786) $ (146,232)
Adjustments to reconcile net loss to net cash
used in operating activities:
Stock-based compensation ...................... -- 11,244 11,244
Amortization and depreciation ................. 4,562 903 5,465
Changes in current assets and current liabilities:
Prepaid expenses .............................. (4,650) -- (4,650)
Employee receivable ........................... (6,579) -- (6,579)
Accounts payable and accrued expenses ......... 4,620 15,352 19,972
--------- -------- -----------
Net cash used in operating activities ....... (120,493) (287) (120,780)
--------- -------- -----------
Investing activities:
Cash paid for copyright ....................... (61) (424) (485)
Cash paid for trademark ....................... (525) (1,935) (2,460)
Cash paid for website ......................... (20,000) (7,500) (27,500)
Cash paid for patent .......................... (8,840) -- (8,840)
Equipment ..................................... (8,346) -- (8,346)
--------- -------- -----------
Net cash used in investing activities ....... (37,772) (9,859) (47,631)
--------- -------- -----------
Financing activities:
Proceeds from sale of common stock ............ 984,500 42,500 1,027,000
Lease payments ................................ (661) -- (661)
Offering costs deferred ....................... (4,384) (16,796) (21,180)
Contributed capital (Note 4) .................. 10,000 -- 10,000
--------- -------- -----------
Net cash provided by financing activities ... 989,455 25,704 1,015,159
--------- -------- -----------
Net change in cash ................................... 831,190 15,558 846,748
Cash and cash equivalents at beginning of period ..... 15,558 -- --
--------- -------- -----------
Cash and cash equivalents at end of period .. $ 846,748 $ 15,558 $ 846,748
========= ======== ===========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest ...................................... 230 -- 230
========= ======== ===========
Income taxes .................................. -- -- --
========= ======== ===========
Non-cash investing and financing activities:
Equipment purchased under capital lease (Note 2) 3,871 -- 3,871
========= ======== ===========
</TABLE>
See accompanying notes to financial statements
F-6
<PAGE> 50
IDMEDICAL.COM, INC.
NOTES TO FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) ORGANIZATION AND BASIS OF PRESENTATION
IDMEDICAL.COM, Inc. was incorporated on June 17, 1999 to capitalize on
the growing demand for online medical records systems through the
phased acquisition, integration, and growth of existing independent
online medical records systems providers in targeted geographic
regions. The goal of the Company is to become the premier national
provider of online medical records systems. The Company is a
development stage enterprise in accordance with Statement of Financial
Accounting Standard (SFAS) No. 7.
Inherent in the Company's business are various risks and
uncertainties, including its limited operating history, historical
operating losses, dependence upon strategic alliances, and the limited
history of the need for internet services. The Company's future
success will be dependent upon its ability to create and provide
effective online medical records systems, the continued acceptance of
the Internet and the Company's ability to develop and provide new
products that meet customers changing requirements, including the
effective use of leading technologies, to continue to enhance its
current systems, and to influence and respond to emerging industry
standards and other technological changes on a timely and
cost-effective basis.
(b) USE OF ESTIMATES
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at
the date of financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
(c) CASH AND CASH EQUIVALENTS
The Company considers all highly liquid securities with original
maturities of three months or less when acquired to be cash
equivalents.
(d) PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is calculated
using the straight-line method over the estimated useful lives of the
related assets, generally ranging from three to five years. Property
and equipment under capital leases are stated at the present value of
minimum lease payments and are amortized using the straight-line
method over the shorter of the lease term or the estimated useful
lives of the assets. Leasehold improvements are amortized using the
straight-line method over the estimated useful lives of the assets or
the term of the lease, whichever is shorter.
F-7
<PAGE> 51
IDMEDICAL.COM, INC.
NOTES TO FINANCIAL STATEMENTS
WEBSITE AND SOFTWARE
In accordance with the provisions of Statement of Position 98-1,
"Accounting For the Costs of Computer Software Developed for
Internal Use", the cost of developing and implementing the
Company's internet website was expensed until the Company
determined that the website would result in future economic
benefit and management was committed to funding the project.
Thereafter, all direct external implementation and development
costs were capitalized and amortized using the straight-line
method over the remaining estimated useful lives, not exceeding
three years. The Company capitalized website costs of $7,500 and
$27,500 respectively during the period from June 17, 1999
(inception) to December 31, 1999 and the seven months ended July
31, 2000. The Company recorded amortization expense related to
the capitalized website costs of $903 and $4,236, respectively
for the period from June 17, 1999 (inception) to December 31,
1999, and for the seven months ended July 31, 2000
(e) INTANGIBLE ASSETS
Intangible assets consist of the costs to obtain a copyright.
Such costs are amortized over the estimated useful life of the
copyright on the straight-line basis.
(f) OTHER ASSETS
Other assets include various patent and trademark application
costs. The Company will begin amortizing these costs as the
applications are approved.
(g) IMPAIRMENT OF LONG-LIVED ASSETS
The Company evaluates the carrying value of its long-lived assets
under the provisions of Statement of Financial Accounting
Standards No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of (Statement No.
121). Statement No. 121 requires impairment losses to be recorded
on long-lived assets used in operations, including goodwill, when
indicators of impairment are present and the undiscounted future
cash flows estimated to be generated by those assets are less
than the assets' carrying amount. In addition, the recoverability
of goodwill is further evaluated under the provisions of APB
Opinion No. 17, Intangible Assets, based upon estimated fair
value. If such assets are impaired, the impairment to be
recognized is measured by the amount by which the carrying amount
of the assets exceed the fair value of the assets. Assets to be
disposed of are reported at the lower of the carrying value or
fair value, less costs to sell.
(h) PEERING RELATIONSHIPS
The Company does not pay any fees in connection with its peering
relationships with other companies and does not record revenue or
expense in connection with those arrangements. The nature of
these relationships is that the parties share the responsibility
for communications that occur between their respective local
networks. These peering relationships are essentially exchanges
of similar productive assets rather than a culmination of an
earnings process. Accordingly, these arrangements are
appropriately not reflected in the operations of the Company.
F-8
<PAGE> 52
IDMEDICAL.COM, INC.
NOTES TO FINANCIAL STATEMENTS
(i) SALES AND MARKETING COSTS
Marketing expense includes the costs of advertising and other
general sales and marketing costs. The Company expenses the cost
of advertising and promoting its services as incurred.
(j) FINANCIAL INSTRUMENTS AND CONCENTRATION OF CREDIT RISK
The Company has concentrated its credit risk for cash by
maintaining balances in its checking accounts, money market
account, and certificate of deposit, which may at times, exceed
amounts insured by the U.S. Federal Deposit Insurance Corporation
("FDIC"). The maximum loss that would have resulted from that
risk totaled $475,396, at July 31, 2000 for the excess of the
deposit liabilities reported by the banks over the $100,000
maximum covered by federal insurance. The Company has not
experienced any losses in such accounts and believes it is not
exposed to any significant credit risk to cash.
The carrying amounts of cash and cash equivalents, accounts
payable, and capital lease payable approximate fair value due to
the short-term maturity of the instruments.
(k) STOCK BASED COMPENSATION
The Company accounts for stock-based compensation arrangements in
accordance with Statement of financial Accounting Standards
("SFAS") No. 123, "Accounting for Stock-Based Compensation,"
which permits entities to recognize as expense over the vesting
period the fair value of all stock-based awards on the date of
grant. Alternatively, SFAS No. 123 allows entities to continue to
apply the provisions of Accounting Principle Board )"APB")
Opinion No. 25 and provide pro forma net earnings (loss)
disclosures for employee stock-based compensation as if the
fair-value-based method defined in SFAS No. 123 had been applied.
The Company has elected to continue to apply the provisions of
APB Opinion No. 25 and provide the pro forma disclosure
provisions of SFAS No. 123.
(l) DEFERRED OFFERING COSTS
Included in other assets at December 31, 1999 are $ 16,796 in
costs related to the offering of the Company's common stock. Such
costs were deducted from the proceeds received from the offering.
(m) LOSS PER COMMON SHARE
The Company has adopted Statement of Financial Accounting
Standards No. 128 ("SFAS 128") which requires the disclosure of
basic and diluted earnings per share. Basic earnings per share is
calculated using income available to common shareowners divided
by the weighted average of common shares outstanding during the
year. Diluted earnings per share is similar to basic earnings per
share except that the weighted average of common shares
outstanding is increased to include the number of additional
common shares that would have been outstanding if the dilutive
potential common shares, such as options, had been issued. As of
July 31, 2000 and December 31, 1999, there were 190,000 and
250,000 vested common stock options outstanding, respectively,
which were excluded from the calculation of net income (loss) per
share-diluted because they were antidilutive.
F-9
<PAGE> 53
IDMEDICAL.COM, INC.
NOTES TO FINANCIAL STATEMENTS
(2) BALANCE SHEET COMPONENTS
Cash and Cash Equivalents
<TABLE>
<CAPTION>
July 31, December 31,
2000 1999
--------- ------------
<S> <C> <C>
Main Operating Account ............................................... $ 175,396 $ 15,558
Checking Account ..................................................... 71,273 --
Money Market Account ................................................. 300,000 --
Certificate of Deposit ............................................... 300,000 --
Card Services Account ................................................ 79 --
--------- ------------
Total $ 846,748 $ 15,558
========= ============
</TABLE>
Property and equipment, including equipment under capital lease, stated at cost
<TABLE>
<CAPTION>
July 31, December 31,
2000 1999
-------- ------------
<S> <C> <C>
Property & equipment under capital lease ............................. $ 4,532 $ --
Website costs ........................................................ 27,500 7,500
All other property & equipment ....................................... 8,346 --
-------- ------------
40,378 7,500
Less accumulated depreciation and amortization ....................... (5,369) (903)
-------- ------------
Total $ 35,009 $ 6,597
======== ============
</TABLE>
On April 26, 2000 the Company entered into a one year capital lease agreement
whereby the Company is purchasing certain furniture and equipment at a 15%
interest rate. Minimum monthly payments under the lease are $445.
Intangible Assets
<TABLE>
<CAPTION>
July 31, December 31,
2000 1999
-------- -----------
<S> <C> <C>
Copyright ............................................................ $ 485 $ 424
Less accumulated amortization ........................................ (96) --
-------- -----------
Total $ 581 $ 424
======== ===========
</TABLE>
Other Assets
<TABLE>
<CAPTION>
July 31, December 31,
2000 1999
-------- -----------
<S> <C> <C>
Patent ............................................................... $ 8,840 $ --
Deferred offering costs .............................................. -- 16,796
Trademark ............................................................ 2,460 1,935
-------- -----------
Total $ 11,300 $ 18,731
======== ===========
</TABLE>
F-10
<PAGE> 54
IDMEDICAL.COM, INC.
NOTES TO FINANCIAL STATEMENTS
(3) CAPITAL STOCK
(a) COMMON STOCK
In July 1999 the Company issued 1,000,000 shares of its $.001 par
value common stock in exchange for consulting services valued at
$10,744. Of this amount $5,000 was attributable to legal fees and
$5,744 was for consulting services. The transactions were valued based
on the fair value of the shares of common stock. The Company's board
of directors valued the shares at $.0098 per share, based on
contemporaneous sales of common stock and other analysis.
Commencing in June 2000, the Company sold 978,500 shares of its $.001
par value common stock for $1.00 per share in a private offering
pursuant to an exemption from registration under Rule 506 of
Regulation D of the Securities Act of 1933, as amended. Net proceeds
from the offering totaled $957,320, through July 31, 2000, after
deducting offering expenses of $21,180.
In February 2000, officers contributed a total of $10,000 for working
capital.
(b) PREFERRED STOCK
The Company is authorized to issue 1,000 shares of $.001 par value
preferred stock. The corporation may divide and issue the Preferred
Shares in series. Each Series when issued shall be designated to
distinguish them from the shares of all other series. The relative
rights and preferences of these series include preference of
dividends, redemption terms and conditions, amount payable upon shares
of voluntary or involuntary liquidation, terms and condition of
conversion as well as voting powers.
(c) STOCK OPTIONS
The Company has adopted a non-qualified stock option and stock grant
plan for the benefit of key personnel and others providing significant
services. An aggregate of 1,312,000 shares of common stock has been
reserved under the plan. Options granted pursuant to the plan will be
exercisable at a price no less than the market value of the shares of
common stock on the date of grant. There were 250,000 and 190,000
options outstanding under this plan as of December 31, 1999 and July
31, 2000, respectively. According to the Company's policy, options
granted to employees and directors are accounted for using the
intrinsic method, while options granted to non-employees are accounted
for under the fair value method. The fair value of the Company's
common stock was determined by the board of directors based on
contemporaneous equity transactions and other analysis.
Option Pricing Model
The fair value of each option granted has been estimated as of the
grant date using the Black-Scholes option pricing model with the
following weighted-average assumptions: risk-free interest rate of 5.8
percent, expected volatility of zero percent, expected life of three
to five years, and no expected dividends. From June 17, 1999
(inception) to December 31, 1999, the weighted average exercise price
and fair value of options granted were $.10 and $.002, respectively on
the date of grant for options granted with an exercise price greater
than the fair value of the stock. During the seven months ended July
31, 2000, the weighted average exercise price and fair value of
options granted was $.10 and $.002, respectively on the date of grant
for options granted with an exercise price greater than the fair value
of the stock. There were no options granted with exercise prices that
equaled or were less than the fair value of the underlying stock on
the date of grant.
F-11
<PAGE> 55
IDMEDICAL.COM, INC.
NOTES TO FINANCIAL STATEMENTS
The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options, which have no vesting
restrictions and are fully transferable. Option valuation models also
require the input of highly subjective assumptions such as expected
option life and expected stock price volatility. Because the Company's
stock-based awards have characteristics significantly different from
those of traded options and because changes in the subjective input
assumptions can materially affect the fair value estimate, the Company
believes that the existing option valuation models do not necessarily
provide a reliable single measure of the fair value of its stock-based
awards.
Options granted to non-employees accounted for under the fair value
method
On October 15, 1999 the Company entered into agreements with seven
unrelated third party consultants to provide technical advisory
services, software development services, printing services, and
graphic services to the Company. The Company granted the consultants
fully vested options to purchase 250,000 shares of the Company's
common stock. On October 15, 1999 the fair value of the stock was
$.0054. The options are exercisable at $.10 and expire on October 15,
2003. The Company determined the fair value of the options in
accordance with SFAS 123 to be $.002 and have recorded compensation
expense of $500.
SUMMARY
A summary of the Company's stock option awards to purchase shares of
common stock as of December 31, 1999 and July 31, 2000 and the changes
during period from June 17, 1999 (inception) to December 31, 1999, and
for the seven months ended July 31, 2000:
<TABLE>
<CAPTION>
Fixed Options Number
------------- -------
<S> <C>
Outstanding at June 17, 1999 (inception) --
Granted ................................ 250,000
Exercised .............................. --
Canceled ............................... --
-------
Outstanding at December 31, 1999 ....... 250,000
Granted ................................ --
Exercised .............................. 60,000
Canceled ............................... --
-------
Outstanding at July 31, 2000 ........... 190,000
=======
</TABLE>
F-12
<PAGE> 56
IDMEDICAL.COM, INC.
NOTES TO FINANCIAL STATEMENTS
(4) INCOME TAXES
A reconciliation of U.S. statutory federal income tax rate to the effective
rate follows for the seven months ended July 31, 2000, for the period from
June 17, 1999 (inception) through December 31, 1999, and for the period
from June 17, 1999 (inception) through July 31, 2000:
<TABLE>
<CAPTION>
June 17, 1999
(inception) June 17, 1999
Seven months through (inception)
ended July 31, December 31, through
2000 1999 July 31, 2000
--------------- ------------- --------------
<S> <C> <C> <C>
U.S. statutory federal rate, graduated ...... 25.09% 15.00% 27.56%
State income tax rate, net of federal ....... 3.47% 3.94% 3.35%
Net operating loss (NOL) for which
no tax benefit is currently available ... (28.56)% (8.94)% (30.91)%
--------------- ------------- --------------
0.00% 0.00% 0.00%
=============== ============= ==============
</TABLE>
The benefit for income taxes from operations consisted of the following
components at December 31, 1999 and July 31, 2000, respectively: current
tax benefit of $5,167 and $36,043, respectively resulting from a net loss
before income taxes, and deferred tax expense of $5,167 and $36,043,
respectively resulting from the valuation allowance recorded against the
deferred tax asset resulting from net operating losses. The change in the
valuation allowance for the period from June 17, 1999 (inception) through
December 31, 1999 and for the seven months ended July 31, 2000 was $5,166
and $30,877, respectively. NOL carryforwards at December 31, 1999 will
begin to expire in 2018. The valuation allowance will be evaluated at the
end of each year, considering positive and negative evidence about whether
the asset will be realized. At that time, the allowance will either be
increased or reduced; reduction could result in the complete elimination of
the allowance if positive evidence indicates that the value of the deferred
tax asset is no longer impaired and the allowance is no longer required.
Should the Company undergo an ownership change, as defined in Section 382
of the Internal Revenue Code, the Company's tax net operating loss
carryforwards generated prior to the ownership change will be subject to an
annual limitation which could reduce or defer the utilization of those
losses.
(5) COMMITMENTS
OPERATING LEASE
The Company rents office space under an operating lease. Monthly rentals
under the lease are $1,100. The lease expires in May 2001. Also, the
Company rents office space in Boulder, Colorado on a month to month basis
for $420.
F-13
<PAGE> 57
IDMEDICAL.COM, INC.
NOTES TO FINANCIAL STATEMENTS
(6) SUBSEQUENT EVENT
The Company sold 50,000 shares of common stock for proceeds of $50,000
subsequent to July 31, 2000, for a total of 9,864,500 shares of common
stock issued and outstanding.
Also, subsequent to July 31, 2000 the Company issued 1,000,000 and
1,250,000 warrants to purchase common stock at $2.00 and $1.10
respectively. These are the only warrants outstanding.
F-14
<PAGE> 58
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
3.1 Articles of Incorporation, as currently in effect. (Filed
herewith).
3.2 Bylaws dated June 28, 1999 and as currently in effect.
(Filed herewith).
5.1 Opinion of Counsel, Futro & Trauernicht, LLC. (Filed
herewith).
10.1 IDMedical.com, Inc. 1999 Stock Option Plan. (Filed herewith).
10.2 Form of Common Stock Purchase Warrant, exercise price $1.10
(Filed herewith).
10.3 Form of Common Stock Purchase Warrant, exercise price $2.00
(Filed herewith).
10.4 Contract with digitalNATION -- a VERIO company -- Inc. for Web
hosting, executed November 10, 1999. (Filed herewith).
23.1 Consent of Futro & Trauernicht, LLC. (Included in Exhibit
5.1).
23.2 Consent of Cordovano & Harvey, P.C. (Filed herewith).
27 Financial Data Schedule. (Filed herewith).
</TABLE>
