File No.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF
SECURITIES OF SMALL BUSINESS ISSUERS UNDER SECTION
12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
U.S. Harvest Medical Technologies Corporation
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(Name of Small Business Issuer in its charter)
Maryland 52-2037424
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(State or other jurisdiction or (I.R.S. Employer
incorporation or organization) Identification No.)
One East Chase Street. Baltimore, Md. 21202
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number (410) 244-6570
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Securities to be registered pursuant to Section 12(b) of the Act. None
Title of each class Name of each exchange on
which registered
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Securities to be registered pursuant to Section 12(g) of the Act.
Common Stock - $0.0038 Par Value
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(Title of Class)
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(Title of Class)
1 of 188 Total Pages
FORWARD LOOKING STATEMENTS
U.S. Harvest Medical Technologies Corporation (hereinafter referred to
as the "Company") cautions readers that certain important factors may
affect the Company's actual results and could cause such results to
differ materially from any forward-looking statements that may be
deemed to have been made in this Form 10-SB or that are otherwise made
by or on behalf of the Company. For this purpose, any statements
contained in the Form 10-SB that are not statements of historical fact
may be deemed to be forward-looking statements. Without limiting the
generality of the foregoing, words such as "may," "expect," "believe,"
"anticipate," "intend," "could," "estimate," "plan," or "continue" or
the negative or other variations thereof or comparable terminology are
intended to identify forward-looking statements. Factors that may
affect the Company's results include, but are not limited to, the
Company's limited operating history, its ability to produce additional
products and services, its dependence on a limited number of customers
and key personnel, its possible need for additional financing, its
dependence on certain industries, and competition from its customers.
With respect to any forward-looking statements contained herein, the
Company believes that it is subject to a number or risk factors,
including: competitive actions; lack of available financing; and
general economic and business conditions. Any forward-looking
statements in this report should be evaluated in light of these
important risk factors. The Company is also subject to other risks
detailed herein or set forth from time to time in the Company's filings
with the U.S. Securities and Exchange Commission.
TABLE OF CONTENTS
PART I
Item 1. Description of Business ............................. 3
Item 2. Management's Discussion and Analysis or
Plan of Operation ................................... 6
Item 3. Description of Property ............................. 7
Item 4. Security Ownership of Certain Beneficial
Owners and Management ............................... 8
Item 5. Directors and Executive Officers, and
Promoters and Control Persons ....................... 9
Item 6. Executive Compensation .............................. 12
Item 7. Certain Relationships and Related Transactions ...... 12
Item 8. Description of Securities ........................... 13
PART II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Related Stockholder Matters ....... 14
Item 2. Legal Proceedings ................................... 14
Item 3. Changes in and Disagreements with Accountants ....... 14
Item 4. Recent Sales of Unregistered Securities ............. 14
Item 5. Indemnification of Directors and Officers ........... 14
PART F/S
Item 1. Preliminary Prospectus .............................. 16
Item 2. Financial Statements ................................ 49
PART III
Item 1. Index to Exhibits ................................... 57
Item 2. Description of Exhibits ............................. 57
PART I
ITEM 1. DESCRIPTION OF BUSINESS
(a) U.S. Harvest Medical Technologies Corporation (hereinafter
referred to as the "Company") is filing this Form 10 SB on a
voluntary basis in order to make its financial and other
information equally available to any interested parties or
investors.
The Company was incorporated September 29, 1997 pursuant to the
laws of the State of Maryland, as a physician controlled
organization for the purposes of providing comprehensive
laboratory services to CLIA approved laboratories throughout
the Maryland community, at large, primarily for tumor
sensitivity/resistance analysis and identification of the
genetic variations of hematopoetic malignant disease causing
microorganisms i.e., HIV that lead to cancers, in man. The
Company intends to market proprietary enzyme technologies for
use in the field of pharmacogenomics in the detection of single
nucleotide polymorphisms (SNPs). Other Federally licensed
technologies will be marketed for use in clinical medicine for
patient progress monitoring by detecting the presence of
circulating cancerous and pre-cancerous tumor cells in blood,
amniotic fluids, bone marrow and urine.
The Directors feel now is the time to either pursue commercial
development of the AMERICA TEST and its products i.e., the
Bactobridge (Bactos) and genetic identification technologies
independently, or seek to attract major corporations for that
purpose through agreements which would allow mutual
participation in the success of its work on a long
term basis.
(b) Business of Company.
1. The Corporation is a new company without any operating
history and has generated no revenues to date and has not
offered any products to the general public. At the present
time, the Company is dependent upon the efforts of medical
and health care professionals, business executives and
support staff (see "Management of the Company"). The Company
intends to enter into goal-oriented laboratory testing
contracts with scientists and professors from the University
of Maryland School of Medicine and the University of
Maryland Medical System. The Company has also signed
Proprietary Information Agreements with the InterContinental
Telecommunications Corporation ("InterContel") and the
Laboratory Corporation of America (Lab Corp).
2. Not applicable.
3. None.
4. The Company along with others believes competition in the
industry will be based on technological superiority, the
availability of patent protection, and ability to
commercialize technological developments.
5. Not applicable.
6. Not applicable.
7. In the United States, although a patent has a statutory
presumption of validity, the issuance of a patent is not
conclusive as to such validity or as to the enforceable
scope of the claims therein. Nevertheless, the Company has
several patents currently pending on all products and
processes, including with the Patent Cooperative Treaty
("PCT").
8. The Bactos and several components of the AMERICA TEST have
received AMA, Medicaid and FDA clearance [510 (k)
registration number #936123], which authorizes its use for
rapid antibiotic analysis and tumor and chemosensitivity
testing.
9. On April 18, 2000 the Company signed an Agreement with the
Department of Health and Human Services (DHHS) to use
patented technology developed by the National Cancer
Institutes for use in the field of Pharmacogenomics.
On February 7, 2000 the Company received authorization to
begin using the AMERICA TEST in the University of Maryland
Medical Systems.
From December 27 - 30, 1999, the Company participated in
genetic engineering experiments along with Senior Scientist
from the Department of Pathology at the University of
Maryland School of Medicine aimed at commercialization of
restriction enzyme technologies.
On November 16, 1999, the National Medicare Laboratory and
Diagnostic Service Panel concluded that a group of clinical
laboratory tests known as human tumor assay systems such as
the AMERICA TEST show clinical utility.
On November 4, 1999 the Company signed an Agreement with the
Office of Research Development at the University of Maryland
in Baltimore to sponsor the Re-issue and legal defense of
patented biologic technologies developed in the Department
of Pathology of the School of Medicine of the University of
Maryland.
From June 2, 1998 thru February, 1999 the Company (under the
direction of University of Maryland Scientist) conducted
accuracy and performance tests with live bacterial and human
cancerous tissue in the Bactobridge at the Beta Testing
facility at the University of Maryland in Baltimore.
On March 26, 1998, the Institutional Review Board for the
University of Maryland approved the Company's protocol for
the use of the Bactobridge for tumor response tests to be
performed at the Department of Medical and Research
Technology (DMRT) at the University of Maryland School of
Medicine.
On July 2, 1997, the Company received authorization from the
Maryland Medical Care Policy Administration of the
Department of Public Health and Mental Hygiene for
reimbursement for the use of the Bactobridge.
10. approximately three hundred fifty thousand dollars
($350,000) has been spent for each of the past two fiscal
years on research and development, none of the cost has been
borne by future customers.
11. None.
12. Five.
(c) Reports to securities holders.
1. The Company is presently not required to deliver annual
reports to security holders, but will send an annual report,
including audited financial statements, in the future.
2. The Company is presently not a reporting company and does
not file reports with the Securities and Exchange
Commission.
3. The public may read and copy all materials the Company files
with the U.S. Securities and Exchange Commission (the "SEC")
at the SEC's Public Reference Room at 450 Fifth Street N.W.,
Washington, D.C. 20549. The public may also obtain
information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330.
(d) Not applicable.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
(a) Not Applicable.
(b) Management's Discussion and Analysis of Financial Condition and
Results of Operations.
1. Without a successful offering, the Company will not have the
financial resources required to accomplish its purposes. The
Company has no alternative source of liquidity other than
this offering and its current cash assets.
The Company has made no material commitments for capital
expenditures. The Company is solely dependent upon the
successful offering of these shares as its source of funds
required to market the America Test and other patented
technologies. The Company may consider the possibility of
offering additional shares for sale to the public at some
time in the future. Any such additional offering would be
dependent upon the Company's assessments of a number of
factors including the need for additional funding, current
economic and market conditions and the market demand for the
shares.
The Company intends to enter into goal oriented performance
contracts with scientists and physicians from the University
of Maryland Medical System for patient care and much of its
product development activities, upon successful completion
of this offering. The Company believes that during this
period there will be no significant adverse impact from
inflation and changing prices on the Company's operation
(i) At present there are no trends, events or
uncertainties that have or are reasonably likely to
have a material impact on the Company's short-term or
long-term liquidity.
(ii) Not Material.
(iii) At present there are no material commitments for
capital expenditures, except for the management of
its own business affairs.
(iv) There are no known trends, events or uncertainties
that have or that are reasonably expected to have a
material impact on the revenues from operations.
(v) Not applicable
(vi) The general and administrative expenses for the years
1998 and 1999 remained the same due to no changes in
management.
(vii) None.
2. Not applicable.
ITEM 3. DESCRIPTION OF PROPERTY.
(a) Company's office is located at One East Chase Street,
Baltimore, Maryland 21209. Upon successful completion of this
offering, the Company intends to lease/purchase additional
modest office and executive housing facilities in the Baltimore
metropolitan area.
(b) Investment Policies.
1. Not applicable.
2. Not applicable.
3. Not applicable.
(c) Description of Real Estate and Operating Data.
1. Not applicable.
2. Not applicable.
3. The Company rents its office facilities pursuant to an
Office Rental Agreement, dated May 1, 1998, between The
Belvedere Condominiums and the Hartech Corporation. The
term of the agreement is month-to-month, for $250.00 per
month, plus its share of the operating costs of the
facility, and other expenses (i.e., phones).
4. Not applicable.
5. Not applicable.
6. In the opinion of management, the Company's property is
adequately covered by insurance.
7. Not applicable.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) Security Ownership of Certain Beneficial Owners.
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(1) (2) (3) (4)
TITLE OF NAME AND ADDRESS AMOUNT AND PERCENT
CLASS OF BENEFICIAL NATURE OF OF
OWNER BENEFICIAL CLASS
OWNER
Common W.L. Robinson, Jr.,
2517 Quantico Avenue, 128,628,717 39%
Baltimore, Maryland 21215
Common R. Benjamin Dawson
5404 Iron Pen Place 35,793,950 11%
Columbia, Maryland 21114
Common J.R. Hurtt
5962 Greenmeadow Pkwy, 22,388,000 7%
Baltimore, Md. 21209
Common M.E. Robinson
2517 Quantico Avenue 20,971,000 6%
Baltimore, Maryland 21244-2505
Common Spencer L. McCain
3319 Rogers Avenue 12,025,000 5%
Baltimore, Maryland 21215
Common Hartech Corporation and
Other Directors/Officers 48,750,000 15%
as a group
(b) Security Ownership of Management.
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(1) (2) (3) (4)
TITLE OF NAME AND ADDRESS AMOUNT AND PERCENT
CLASS OF BENEFICIAL NATURE OF OF
OWNER BENEFICIAL CLASS
OWNER
Common W.L. Robinson, Jr.,
2517 Quantico Avenue, 128,628,717 39%
Baltimore, Maryland 21215
Common R. Benjamin Dawson
5404 Iron Pen Place 35,793,950 11%
Columbia, Maryland 21114
Common J.R. Hurtt
5962 Greenmeadow Pkwy, 22,388,000 7%
Baltimore, Md. 21209
Common M.E. Robinson
2517 Quantico Avenue 20,971,000 6%
Baltimore, Maryland 21244-2505
(c) Changes in Control.
None.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, AND PROMOTERS AND CONTROL PERSONS.
(a) Identify directors and executive officers.
Name Age Position
William L. Robinson, Jr. 51 Chairman of the Board of
Directors & CEO
R. Benjamin Dawson, MD 65 President and a Director
Martha E. Robinson 53 Corporate Secretary
John R. Hurtt 52 Chief Information Officer
and a Director
Frances M. Dawson 58 Director
Christopher F. Frampton, Eur. Ing 52 Director
Raymond K. Robinson 36 Director
Robert F. Dashiell, Esq. 53 Special Counsel
William L. Robinson, Jr., Chairman of the Board of Directors and Chief
Executive Officer, is a founder and has been with the Company since its
inception. Although working for the Company, he is the Chairman & CEO
of the Hartech Corporation, a Maryland Corporation. Mr. Robinson has
over two decades of biomedical research experience in the sciences of
stimulation of the natural immune system through the induction of human
interferons, the electro-biophysics of human tumor cells and pathogenic
microorganisms and the reconstitution of nutritional deficiencies in
shellfish after irradiation processing. Mr. Robinson successfully
co-authored the Company's application [510-(k) 96123] presented to the
FDA for the use of electrical impedance technologies in rapid
antibiotic, chemosensitivity and tumor cell analyses. He is co-
author of several patents pending. He received his education in the
biomedical sciences at major American Universities including the
University of Wisconsin (Madison) and the Johns Hopkins
University and is a former member of the Atomic Industrial Forum, the
American Society for the Testing of Material (ASTM) and Who's Who in
Science and Technology. Mr. Robinson devotes his full time to the
affairs of the combined Companies.
Roy Ben Dawson, MD, President of the Company and Chairman of the Board
of Scientific Advisors has been with the Company since its inception.
In addition to working for the Company he is the President of the
Hartech Corporation, a Maryland Corporation. Dr. Dawson is a fully
trained internist specializing in medicine and hematology and a full
professor of pathology. He is certified in transfusion medicine. Dr.
Dawson devotes his full time to the affairs of the combined Companies.
John R. Hurtt, Chief Information Officer and a Director has been with
the Company since its inception. Mr. Hurtt is an engineer with over 28
years of applied knowledge in the health sciences with a specialty in
medical diagnostic digital imaging systems. He is the co-author of the
Company's intellectual property and its FAP petition. He is licensed
under the Code of Maryland Regulation (COMAR) 26.12.01.01 B.5
(Application for registration of services and servicing Service -
Registration Number 019-02 - Radiation Machine Program, State of
Maryland, Department of the Environment) and has performed engineering
duties in various modalities, including radiology, radiation therapy,
cardio-vascular, neuroangio and ultrasound. Prior to working for the
Company he was the acting Chief Information Officer of the Hartech
Corporation, a Maryland Corporation for the past 10 years. Mr. Hurtt
devotes his full time to the affairs of the combined Companies.
Martha Elaine Robinson, Corporate Secretary/Treasurer and a Director
have been with the Company since its inception. Mrs. Robinson was a
former Employer for the Md. Court System for over a decade. Prior to
working for the Company she was the acting Corporate Secretary and Vice
President of Internet Services of the Hartech Corporation, a Maryland
Corporation for the past 10 years. Mrs. Robinson devotes her full time
to the affairs of the combined Companies.
Frances M. Dawson, a member of the Board of Directors is currently and
has been for the past 23 years the director and conductor of the
Columbia Pro Cantare Chorus in Columbia, Maryland.
Christopher F. Frampton, Eur. Ing., is the European member of the
Company's Board of Directors and currently the managing partner for the
SNS Bioengineering Corporation in London England.
Raymond K. Robinson is a Director of the Company.
Robert F. Dashiell, Esq., Special Counsel. Mr. Dashiells currently
practices law in the State of Maryland and has done so for over 20
years specializing in securities and corporate law.
5. None.
(b) Identify Significant Employees.
All management.
(c) Family Relationships.
William L. Robinson, Jr. is married to Martha E. Robinson.
They are the Sister and Brother in Law of John R. Hurtt and
Raymond K. Robinson. Frances M. Dawson is married to R.
Benjamin Dawson, M.D.
(d) Involvement in Certain Legal Proceedings.
1. None.
2. None.
3. None.
4. None.
ITEM 6. EXECUTIVE COMPENSATION.
(a) General.
1. None.
2. None.
(b) Summary Compensation Table.
Not applicable.
(c) Option/SAR Grants Table.
Not applicable.
(d) Aggregated Option/SAR Exercises and Fiscal Year-End
Option/SAR Value Table.
Not applicable.
(e) Long-Term Incentive Plan ("LTIP") Awards Table.
Not applicable.
(f) Compensation of Directors.
1. Directors of the Company receive $175.00 for each regularly
scheduled meeting of directors, and $350.00 for each
specially scheduled meeting, plus normal out-of-pocket
expenses incurred to attend said meetings.
2. None.
(g) Employment Contracts and Termination of Employment and
Change-in-Control Arrangements.
Included by reference (exhibit).
(h) Reporting On Repricing of Options/SAR's.
Not applicable.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
(a) On December 7, 1999 the Company entered into an Exclusive
Licensing Agreement with the Hartech Corporation to market
and further develop its medically related technologies.
(b) Not applicable.
(c) The Hartech Corporation, a Maryland Corporation, owns 3% of
the outstanding shares of the Company.
(d) Transactions With Promoters.
1. None.
2. None.
ITEM 8. DESCRIPTION OF SECURITIES.
(a) Common Stock.
1. The authorized capital of the Company includes 375,000,000
shares of Common Stock, par value $.0038 per share, of which
329,700,221 shares were outstanding as of January 1, 2000.
All outstanding shares are fully paid and non-assessable.
The holders of the Company's Common Stock are entitled to
one vote per share, to receive such dividends as legally may
be declared by the Board of Directors, and upon liquidation,
to receive any net assets of the Company after the
liquidation and rights of preferred stock shareholders if
any, have been satisfied. There are no pre-emptive,
conversion, cumulative voting, or redemption rights
applicable to the Common Stock. The Directors and Executive
Officers have entered into an agreement with the Company
restricting their dividends and liquidation rights. Holders
of the Common Stock are entitled to a pro-rata share in
dividends and distributions with respect to the Common
Stock, as may be declared by the Board of Directors out of
funds legally available therefore.
2. Not applicable.
3. None.
4. None.
(b) Debt Securities.
1. Not applicable.
2. Not applicable.
3. Not applicable.
4. Not applicable.
(c) Other Securities To Be Registered.
None.
Transfer Agent
The Company has selected the Securities Transfer Corporation
(STCTransfer.com) as the Transfer Agent and the Registrar for the
Company's Securities
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND RELATED SHAREHOLDER MATTERS.
We have no market activity in our stock as of this filing. We have
approximately 900 stockholders of record holding 329,700,221 common
shares. 19,037,221 shares are free trading and 310,663,221 shares are
restricted stock as that term is defined in Rule 144. We have not
declared dividends on our common stock and do not anticipate paying
dividends on our common stock in the foreseeable future.
ITEM 2. LEGAL PROCEEDINGS
We are not a party to any proceedings or threatened proceedings as of
the date of this filing.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
We have had no change in, or disagreements with, our principal
independent accountant during our last two fiscal years.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
No securities have been sold.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Maryland General Corporation Law contains various provisions
entitling directors, officers, employees or agents of the Company to
indemnification from judgments, fines, amounts paid in settlement and
reasonable expenses, including attorney's fees, as the result of an
action or proceeding (whether civil, criminal, administrative or
investigative) in which they may be involved by reason of being or
having been a director, officer, employee or agent of the Company
provided said persons acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interest of the Company
(and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that the conduct complained of was
unlawful). The By-laws of the Company provide that the indemnification
provisions of any applicable law are to be utilized to the fullest
extent permitted.
Limitation on liability of Directors
The Maryland General Corporation Law permits a corporation, through its
certificate of Incorporation, to exonerate its directors from personal
liability to the corporation, or to its stockholders, for monetary
damages for breach of fiduciary duty of care as a director, with
certain exceptions. The exceptions include a breach of the director's
duty of loyalty, acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of law, improper
declarations of dividends, and transactions from which the directors
derived an improper personal benefit. The Company's Certificate of
Incorporation exonerates its directors from monetary liability to the
extent permitted by this statutory provision. The Company has been
advised that it is the position of the Securities and Exchange
Commission that insofar as the foregoing provision is against public
policy as expressed in the Act and is therefore unenforceable.
PART F/S
ITEM 1. Preliminary Prospectus
AN OFFERING STATEMENT PURSUANT TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. INFORMATION CONTAINED IN THIS
PRELIMINARY PROSPECTUS IS SUBJECT TO COMPLETION OR AMENDMENT. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO
THE TIME A PROSPECTUS WHICH IS NOT DESIGNATED AS A PRELIMINARY
PROSPECTUS IS DELIVERED AND THE OFFERING STATEMENT FILED WITH THE
COMMISSION BECOMES QUALIFIED. THIS PRELIMINARY PROSPECTUS SHALL NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION TO BUY SECURITIES IN ANY
STATE IN WHICH SUCH OFFER OR SOLICITATION OF SALE WOULD BE LAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
STATE.
PRELIMINARY PROSPECTUS
U.S. Harvest Medical Technologies Corporation
625,000 Shares
Of
Common Stock (par value $.003)
One East Chase Street
Baltimore, Maryland 21202
PH: (410) 244-6570 & 244-6580
FX: (410) 244-6620
Http://www.ushmedtech.com
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SUBSTANTIAL RISK
FACTORS INCLUDING: (1) THE COMPANY IS A NEW INCEPTION STAGE BUSINESS
WITH NO HISTORY OF OPERATIONS (2) THERE ARE NO DIVIDENDS AND (3)
IMMEDIATE AND SUBSTANTIAL DILUTION OF NET TANGIBLE BOOK VALUE PER SHARE
FROM THE PUBLIC OFFERING PRICE (SEE "DILUTION"). THE PURCHASE OF THESE
SECURITIES SHOULD BE CONSIDERED BY PERSONS WHO CAN AFFORD TO SUSTAIN A
TOTAL LOSS OF THEIR INVESTMENT (SEE "RISK FACTORS" AND "DILUTION").
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR COMPLETENESS OF ANY PROSPECTUS
OR OTHER SELLING LITERATURE. THESE SECURITIES ARE OFFERED PUSUANT TO AN
EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER THE COMMISSION
HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES OFFERED
HEREUNDER ARE EXEMPT FROM REGISTRATION FOR SALE IN THE STATE OF
MARYLAND PURSUANT TO REGISTRATION WITH THE DIVISION OF SECURITIES OF
THE OFFICE OF THE ATTORNEY GENERAL OF MARYLAND, BUT REGISTRATION IS
PERMISSIVE ONLY AND DOES NOT CONSTITUTE A FINDING THAT THE PROSPECTUS
IS TRUE, COMPLETE, AND IS NOT MISLEADING, NOR HAS THE DIVISION OF
SECURITIES PASSED IN ANY WAY UPON THE MERITS OF, RECOMMENDED, OR GIVEN
APPROVAL TO THESE SECURITIES. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE
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Price to Underwriting Proceeds to
Public Discounts and Company (2)
Commissions (1)
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Per Share
Total $8 $.00 $8
Total Minimum $110,000 $.00 $110,000
Total Maximum $5,000,000 $.00 $5,000,000
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IN CONNECTION WITH THIS OFFERING, THE COMPANY MAY OVER ALLOT OR EFFECT
TRANSACTIONS OR MAINTAIN THE MARKET PRICE OF THE SHARES BEING SOLD AT A
LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. MANAGEMENT
RESERVES THE RIGHT TO TERMINATE THIS OFFERING ON ANY DATE AFTER THE
MINIMUM OF $110,000 IS RAISED.
THE SHARES OF THE COMMON STOCK ARE BEING OFFERED BY THE COMPANY ON A
BEST EFFORTS BASIS THROUGH ITS EXECUTIVE OFFICERS WHO WILL NOT RECEIVES
ANY COMMISSIONS.
Until November 4, 2000 all persons affecting transactions in
these securities, whether or not participating in this distribution may
be required to deliver a prospectus.
No dealer, salesman or other person is authorized to give any
information or to make any representations not contained in this
prospectus in connection with the offer made hereby, and, if relied
upon as having been authorized by the Company or any underwriter. This
prospectus does not constitute an offer to sell or a solicitation of an
offer to but the securities offered hereby to any person in any state
or other jurisdiction in which such offer or solicitation would be
unlawful. The delivery of this prospectus at any time does not imply
that information contained herein is correct as of any time subsequent
to its date.
1/ No underwriting discounts or commissions will be paid or deducted
from the proceeds on sales through the Company's executive officers.
2/ Before deducting expenses payable by the Company in connection
with the sale of the shares i.e., prospectus fees and expenses,
securities printing, transfer and issuance, legal, etc.
THE SHARES OF COMMON STOCK ARE BEING OFFERED TO THE PUBLIC BY THE
COMPANY WHEN, AS AND IF RECEIVED BY IT, SUBJECT TO THE PRIOR SALE, TO
WITHDRAWAL OF THE OFFER WITHOUT NOTICE, TO THE APPROVAL OF COUNSEL AND
TO CERTAIN OTHER CONDITIONS.
The date of this Preliminary Prospectus is August 4, 2000
PRELIMINARY PROSPECTUS SUMMARY
The following summary is qualified by the more detailed
information elsewhere in this prospectus. Prospective investors in the
Company should carefully consider the factors set forth herein under
the caption "Risk Factors" and must be read in conjunction with, the
detailed information and financial statements appearing elsewhere in
this prospectus.
THE COMPANY
New technologies coming from the fields of molecular and cellular
biology are able to identify genetic as well as antigenic changes
during the early stages of malignant progression. The Company was
formed as a physician controlled organization, whose products and
services will be used in the efforts to provide comprehensive
laboratory services to CLIA approved laboratories throughout the
Maryland community, at large, primarily for (1) tumor
sensitivity/resistance analysis and identification of genetic
variations of hematopoetic malignant disease causing microorganisms
i.e., HIV that lead to cancers, in man and (2) for detection of the
presence of circulating cancerous and pre-cancerous tumor cells in
blood and other sterile human body fluids and bone marrow and urine.
The Directors feel now is the time to either pursue commercial
development of the AMERICA TEST and its products i.e., the Bactobridge
(Bactos) and genetic identification [single nucleotide polymorphisms
(SNPs)] technologies independently, or seek to attract major
corporations for that purpose through agreements, which would allow
mutual participation in the success of its work on a long-term basis.
The Bactos and several components of the AMERICA TEST have received
AMA, Medicaid and FDA clearance [510 (k) registration number #936123],
which authorizes its use for rapid antibiotic analysis and tumor and
chemosensitivity testing (See "Use of Proceeds" & "Business of the
Company").
Business of the Company
U.S. Harvest Medical Technologies Corporation [NASDAQ Ticker
Symbol USHM (reserved)] is a new company without any operating history
and has generated no revenues to date (see "Risk Factors; Start-up -
Developmental Stage Company"). At the present time, the Company is
dependent upon the efforts of medical and health care professionals,
business executives and support staff (see "Management of the
Company"). The Company intends to enter into goal-oriented laboratory
testing contracts with scientists and professors from the University of
Maryland School of Medicine and the University of Maryland Medical
System). The Company has also signed Proprietary Information Agreements
with the InterContinental Telecommunications Corporation
("InterContel") and the Laboratory Corporation of America (Lab Corp)
(see "Business of the Company" - "Use of Proceeds").
Substantially all of the Company's revenues will come from
equipment user fees, sales and service, leasing and licensing fees. The
Company was incorporated in the State of Maryland in September 1997
(see "Financial Statement"). The principal executive office is located
at One East Chase Street Baltimore, Maryland 21202. The Company's e-
mail address is [email protected].
The Company's Management
Upon consummation of the Offering, the Company will have a seven
member Board of Directors (the "Board") several of whom have management
authority for the Company (see "Management").
THE OFFERING
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Purchase Price The Purchase price for the Company's common stock
is $8 per share.
Voting Rights After completion of this offering, even if all of
the shares of Common Stock are sold, the
Directors and Officers will continue to own
approximately 99% of the Company's outstanding
Common Stock. If only the minimum number of
13,750 shares of Common Stock is sold, the
Shareholders and the Directors will continue to
own approximately 99% of the Company's
outstanding stock. Accordingly, the Directors
will in any event be able to elect all of the
members of the board and will have the legal
ability to cause the company to declare or
refrain from declaring dividends, to increase the
authorized capital, to issue more capital stock
and generally direct the affairs of the Company.
Use of Proceeds Substantially all of the proceeds from the
Offering will be used to fund organizational and
marketing expenses (see "Use of Proceeds").
Risk Factors The acquisition of shares from the Company
involves a number risk see "Risk Factors").
Terms of the The Company is offering the Common Stock on a
Offering "best efforts" basis by the Company. The
Executive Officers and Directors of the Company
are issuer agents in connection with the sale of
the securities. No underwriting discounts sale
fees or commissions will be paid to any entity in
connection with the Offering (except under
certain circumstances see "Underwriting
Agreement").
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RISK FACTORS
AN INVESTMENT IN THE SHARES OFFERED FOR PURCHASE HEREBY IS AN EXTREMELY
SPECULATIVE INVESTMENT AND INVOLVES A HIGH DEGREE OF RISK. ACCORDINGLY,
THE SHARES SHOULD BE ACQUIRED ONLY BY PERSONS WHO CAN AFFORD TO LOSE
THEIR ENTIRE INVESTMENT. PRIOR TO PURCHASING ANY SHARES, PROSPECTIVE
INVESTORS SHOULD CAREFULLY CONSIDER ALONG WITH OTHER MATTERS REFERRED
TO HEREIN, THE FOLLOWING RISK FACTORS:
1. Start up-Development Stage Company. The Company is in the
development stage and its operations are subject to all the risk
inherent in the establishment of a "new" business enterprise, including
the absence of a substantial operating history and no earnings and the
likelihood of the problems, expenses, difficulties, complications and
delays frequently encountered in connection with the formation of a new
business; the development of technology and the competitive and
regulatory environment in which the Company will operate. Prior to this
offering, there has been no established market for the Company's Common
Stock. To date, the original incorporators have funded various start-up
expenses for the Company such as the cost required to market and test
the Bactos at independent clinical laboratories. The Company has an
accumulated deficit of $711,738 (see Balance Sheet). . The Company was
only recently incorporated, have had no significant operations and no
material earnings. Even though the Company is developing functions
normally associated with an on-going business, its activities may not
be profitable in the near future if ever (see "Use of Proceeds").
2. Broad Discretion of Company's Management. The Company's seven
member Board has management authority for the Company with respect to
the manner, in which the business and affairs of the Company are
managed, controlled and operated, including the allocation of the
proceeds from the Offering. It is anticipated that 98% -100% of such
proceeds will be used to fund the development of the Company's products
and services (see "Description of the Company's Operating Agreement").
3. Lack of Voting Control. After completion of this offering, even
if all of the shares of Common Stock are sold, the Directors and
Officers will continue to own approximately 99% of the Company's
outstanding Common Stock. Accordingly, the Directors will in any event
be able to elect all of the members of the board and will have the
legal ability to cause the company to declare or refrain from declaring
dividends, to increase the authorized capital stock, to issue more
capital stock and generally direct the affairs of the Company.
4. Risk of not Reaching the Break Escrow Point; If the minimum is
not reach by the end of the offering period (as the period may be
extended see "offering period"), no interest will be issued and each
share purchased will be refunded, without interest.
5. Elections of Company's Directors; Possible Lack of Member
Participation in Initial Decision-Making. The initial Board of
Directors were selected by the original incorporators of the Company.
These Directors will remain in office for life. To the extent that
there are any vacancies on the Board, such vacancies may be filled by
the Board to serve for three years (subject to approval by the
shareholders). Thus, investors will not have the opportunity to elect
the Board until after the successful Offering by that time: (i)
substantial funds of the Company may have been expended (ii) certain
major issues relevant to the Company's business may have been decided;
and (iii) a substantial portion of the Company's business will have
been developed.
6. Dilution. The present stockholders of the Company, including the
Officers and Directors, have acquired their interest in the Company at
average per share prices substantially less than the per share cost
which the public investors will pay for the Common Stock. The present
shareholders, assuming all 625,000 shares of Common Stock are sold,
would own approximately 99%. In addition, although the Company has no
plans at the present time to effect a second Offering, in the event the
Company determines in the future to issue additional shares in another
Offering by the Company, any dilution that may occur as a result of
such offering will be borne entirely by existing investors (see
"Dilution"). The price at which the shares are being offered to the
public has been arbitrarily determined by the Company based on
anticipated capital needs. There can be no assurance that the share
s can be re-sold at or near the public offering price or at any price.
No refunds will be returned.
7. Determination of Purchase Price; absence of Relation to Company's
Value. The price of the shares has been arbitrarily determined by the
Company and is based upon the amount of money, which the Company
desires to raise, and bears no relationship to the assets or another
criteria of value applicable to the Company.
8. No Dividends Paid. The Company has paid no dividends in the
past. Dividends will be dependent upon the earnings of the Company,
financial needs and other similar unpredictable factors. Investors who
anticipate the need for immediate or future income by way of dividends
from their investments should refrain from the purchase of the shares
offered hereby.
9. Absence of Public Market. There has never been nor is there now a
market for the shares, and there can be no assurance that a market will
develop for the Common Stock of the Company.
10. Dependence Upon Third-Party Manufacturers. The Company engages
small contract manufacturers to supply its products, pursuant to
purchase orders. As order volume increases, the Company has the
flexibility of engaging larger manufacturers with greater production
capabilities. There can be no assurance that its products can be
manufactured reliably on a large-scale basis on commercially reasonable
terms, or at all. The Company is substantially dependent on the ability
of its third-party manufacturers to among other things, meet the
Company's design, performance and quality specifications. Failure by
the Company's third-party manufacturers to comply with these and other
requirements could have a material adverse effect on the Company. There
can be no assurance that the Company's third-party manufacturers will
dedicate sufficient production capacity to meet the Company's scheduled
delivery requirements or that the Company's manufacturers will have
sufficient production capacity to satisfy the Company's requirements
during any period of sustained demand. Moreover, the electronics
industry from time to time experiences short supplies of certain high
demand components, which may adversely affect the Company's ability to
meet its production schedules. Failure of manufacturers to meet
production demands of the Company, or allocations in the supply of
certain high demand components could adversely affect the Company's
operations and ability to meet its own delivery schedules on a timely
and competitive basis. There can be no assurance that if such problems
develop at a time when the Company is just beginning to deliver its
products to the commercial marketplace, the Company will be able to
rectify such problems to avoid a material adverse effect on its
intended plan of operations or financial results. See "Business-
Manufacturing and Materials."
11. Estimate of Sales Price of the Bactos. Although large-scale
manufacture of the Bactos has not occurred yet, preliminary estimates
have been made of the prices at which the units, when delivered, will
be sold or leased.
12. Risk of Substantial Competition. The Company along with others
believes competition in the industry will be based on technological
superiority, the availability of patent protection, ability to
commercialize technological developments.
13. Dependence upon Key Personnel. At present, the Company is
totally dependent upon Dr. R. Benjamin Dawson, a Director, President
and Chairman of the Board of Scientific Advisors and William L.
Robinson, Jr., Chairman of the Board of Directors and CEO. The Company
intends to enter into employment agreements with W.L. Robinson, Jr.,
M.E. Robinson, R. Benjamin Dawson, M.D. and J.R. Hurtt. The Company
intends to sign consulting agreements with Dr. Tepper and other members
of the Scientific Board of Advisors (see "Management"). The Company
also intends to obtain insurance in the amount of at least $1,000,000
for all key personnel. In the event of death, the proceeds of such
insurance might not compensate the Company fully for the loss of
services, especially during the early stages of development. Should the
Company lose the services of its President and Chairman/C.E.O. and key
medical personnel, it is likely that such a loss would be substantially
detrimental to the growth of the Company.
14. Use of proceeds for salaries and consulting fees to the
Directors and Officers of the Company and other business related
expenses. A significant portion of the proceeds from this offering has
been allocated for salaries to W.L. Robinson, Jr., M.E. Robinson, R.
Benjamin Dawson, MD and J.R. Hurtt, all of who are substantial
shareholders of the Company along with legal fees to Robert Fulton
Dashiell, Esq., General Counsel and Edward L. Blanton, Jr., and other
outside Counsel and for general administrative expenses.
15. Limitation on Liability of Directors and Officers. The Company's
Operating Agreement provides that Directors and Officers will not be
personally liable to the Company for monetary damages resulting from
breach of any duties owed to the Company except under certain
circumstances. As a result, the rights of the Company to obtain
monetary damages for acts or omissions of the Directors and Officers
will be limited as indicated above. (See "-Indemnification of the
Directors and Executive Officers").
16. No Independent Director. Following this offering the Company
intends to elect two independent Directors. Presently there are no
independent Directors to the Company.
17. Anti-Trust Considerations. The activities of the Company and its
business activities may be subject to challenge pursuant to the federal
anti-trust laws based upon allegations that the Company or its
activities constitute a violation of federal laws prohibiting price
fixing, restraints on trade or monopolization.
FOR ALL OF THESE AND OTHER REASONS MORE PARTICULARLY SET FORTH
ELSEWHERE IN THIS PROSPECTUS, INVESTMENTS IN THE COMPANY INVOLVES A
HIGH DEGREE OF RISK, WHICH SHOULD BE CONSIDERED BY A PROSPECTIVE
INVESTOR IN ANY DECISION TO ACQUIRE THE SHARES OFFERED HEREBY.
TERMS OF THE OFFERING
Purchase Price.
The Company is offering shares for a purchase price of $8. The
Company is offering the shares on a "best efforts" basis. The Directors
are representing the Company as issuers in connection with the
offering. The purchase price per share has been arbitrarily determined
by the Company (see "Risk Factors" - Determination of Purchase Price;
Absence of Relation to Company's Value." The purchase price is payable
to the Company by bank check or money order or credit cards.
Investors of the Company will not receive interest on their
investment. It is anticipated that the Company will not accumulate any
material surplus, except for operating reserves retained to meet
anticipated expenses in the ordinary course of business. Substantially
all of the Company's future profits will be distributed to its
investors. Investors are expected to join the Company primarily for the
purpose of realizing a return on their own individual investments.
Offering Period
The Offering will remain open until the Directors deem it no
longer necessary.
USE OF PROCEEDS
Assuming the sale of 13,750 shares of common stock at an initial
public offering price of $8 per share, the minimum gross proceeds from
this offering will be $110,000. The minimum net proceeds to be received
by the Company from this offering are calculated to be $85,000
[$110,000 minus offering cost of $25,000 (22.73% of minimum net
proceeds)]. The Company will pay all the expenses associated with the
registration of the Shares, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow
fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses, and expenses of any special audits incident to or
required by the registration.
Assuming the sale of 625,000 shares of common stock at an initial
public offering price of $8 per share, the maximum gross proceeds from
this offering will be $5,000,000. The maximum net proceeds the Company
expects to receive from this offering are calculated to be $4,900,000
[$5,000,000 minus offering cost of $100,000 (2% of maximum net
proceeds)]. Additional offering cost includes public and investors
relations and audience building (to identify analysts, broker dealers,
brokers and others, who will assist in establishing a secondary market
for the Company's Common Stock).
The net proceeds from this offering (to the extent sold) will be
used for; (1) creation of a commercial clinical oncology laboratory
testing program for physician/scientific investigators using the
AMERICA TEST for individualized pre-therapeutic cancer intervention
laboratory procedures performed at the University of Maryland Medical
System and other CLIA approved laboratories), (2) for marketing
pathogen reduction and DNA identification technologies for use in the
field of pharmacogenomics, including proprietary biomarkers of pre-
neoplastic development or early malignant transformation, (3) for
retention of outside legal counsel and (4) for corporate operations.
The Company has an allocation plan to accomplish its objective of
bringing the products to market and growing the business.
The following table sets forth the expected use of proceeds from
this offering (based on the minimum and maximum offering amounts):
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Offering Amount
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Use Of Net Proceeds Minimum Net % Of Maximum Net % Of
Proceeds Total Proceeds Total
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1. Working Capital
1.a. Oncological Application
Specific Development of
the America Test N/A N/A 200,000 4.00%
1.b. Cancer Clinical Trials and
Drug Screening Projects N/A N/A 250,000 5.00%
1.c. Purchase of Bactobridge
Modules, Associated
Equipment and Supplies N/A N/A 600,000 2.00%
1.d. PC-based Bactobridge
System/Network Installation
and Technical Support N/A N/A 1,002,990 20.06%
1.e. Business Operations Support 25,000 22.73% 1,459,548 29.19%
2. Sales and Marketing 10,000 9.09% 719,668 14.39%
3. Product Development N/A N/A 350,000 7.00%
4. Asset Acquisition and
Appraisals 50,000 45.45% 317,794 6.36%
TOTAL $85,000 72.27% $4,900,000 8.00%
1. The proceeds from this offering (to the extent sold) will be used
primarily to provide the necessary working capital:
1.a. To hire medical and clinical laboratory applications
personnel in order to concentrate on the oncological
application specific development of the America Test
including the Bactobridge and restrictive enzyme
technologies for reimbursement from the State of Maryland
(Department of Health and Mental Hygiene, Medical Care
Policy Administration, Maryland Medical Assistance
Program). The Company plans to hire qualified personnel
referred from the Department of Health and Human Services.
1.b. For the creation of a commercial clinical oncology
Laboratory-testing program titled: "Cancer; A Clinical
Trials/Drug Screening Project", which utilizes the America
Test (including the Bactobridge and Restrictive Enzyme
Technologies) within the Department of Medical and Research
Technology (DMRT) and the Department of Pathology,
University of Maryland School of Medicine, the University
of Maryland at Baltimore. The program is eligible for
reimbursement in the State of Maryland from health
insurers, nonprofit health service plans, and health
maintenance organizations for specified patient cost
incurred as a result of treatment or studies conducted in
accordance with the above mentioned cancer clinical trial
project and for the cost of the use of the Company's FDA-
approved Bactobridge device (Maryland Clinical Trials Bill,
HR - 45, April 7, 1998),
1.c. To purchase additional Bactobridge Modules, PC's,
Conductivity Measuring Test Tubes and other materials and
supplies, necessary to support the Company's business
opportunities as a FDA approved distributor within the
State of Maryland [FDA - 510(k) #936123],
1.d. To hire additional management and engineering/technical
personnel, necessary to provide Bactobridge and PC
technical support (including installation & servicing);
network integration services, network and desktop support,
telecommunications support and to obtain a contract to
provide for a Laboratory Information System/Network for
medical billing, placing lab test orders and retrieving
results via the Internet/World-Wide Web,
1.e. In order for the Company to support its business operations
within the State of Maryland, the Company will use a
portion of the proceeds to hire the following personnel: a
CFO, a general manager, a regulatory compliance officer,
order clerks (for materials, merchandise, and service),
administrative services manager, administrative secretary,
general office clerk, bookkeeping, accounting and auditing
clerk, payroll and timekeeping clerk and medical billing
personnel. The Company plans to hire qualified personnel
referred from the Department of Health and Human Services.
In addition, the Company plans to engage outside legal
counsel and accounting services
2. The Company will capitalize on existing business opportunities
within the Department of Pathology, University of Maryland School
of Medicine and then aggressively develop markets necessary to expand
its business operations to include other CLIA approved laboratories
within the surrounding Maryland healthcare communities by hiring
customer service representatives, sales, marketing, advertising and
public relations personnel.
3. The Company has developed a unique human tumor assay system (the
AMERICA TEST that will allow physician/scientific investigators to
perform individualized pre-therapeutic cancer intervention laboratory
procedures. To further ensure the Company's competitive advantage,
working capital will also be used to support further research and
development of the Company's technologies, including both Bactobridge
hardware and software, conductivity measuring test tubes, and DNA
identification technologies.
4. The Company anticipates expanding its existing business
activities by obtaining nonexclusive licenses from the Department of
Health and Human Services [including, the National Cancer Institute
(NCI), the National Institutes of Health (NIH), the National Human
Genone Research Institute NHGRI and the Food and Drug Administration
(FDA)] for use in three important medical markets [i.e., cancer patient
progress monitoring, clinical laboratory and diagnostics services and
oncopharmacogenomics (DNA recognition)] designed to have a direct
impact on patient care. The Company also believes it is possible to
increase the asset values of its intellectual property by having them
periodically appraised.
Other Information
Management anticipates expending these funds for the purposes
indicated above. To the extent that expenditures are less than
projected, the resulting balances will be retained and used for general
working capital purposes or allocated according to the discretion of
the Board of Directors. Conversely, to the extent that such
expenditures require the utilization of funds in excess of the amounts
anticipated, supplemental amounts may be drawn from other sources,
including, but not limited to, general working capital and/or external
financing. We can give no assurance that additional financing will be
available to us on acceptable terms, or at all. Any failure to obtain
additional financing, if required, could have an adverse effect on us,
including possibly requiring us to curtail our operations. The net
proceeds of this offering that are not expended immediately may be
deposited in interest or non-interest bearing accounts, or invested in
government obligations, certificates of deposit, commercial paper,
money market mutual funds, or similar investments.
DILUTION
W.L. Robinson, Jr., has entered into an Agreement with the
Company restricting him from participating in dividend distributions
until the Company's total pre-tax earnings, from all sources including
investment income, as computed for federal income tax purposes, amount
to $7,500,000 on a cumulative basis from the inception of the Company.
In addition, the Agreement provides that if the Company liquidates,
merges, is acquired or otherwise enters into any transaction resulting
in the distribution of its assets within two (2) years after the date
of this offering, or thereafter or prior to the time the average market
price of the Company's Common Stock has been $12.00 per share or more
for a period of ninety (90) days ending on or after July 1, 2000, the
Directors and Officers of the Company will not participate in any
distributions resulting there from until all shareholders holding
Common Stock originally issued as part of this Offering, have received
distributions at least equal to one and a half times the initial
offering price of the stock per share. The restrictions on
participation in dividends will not be binding upon persons acquiring
shares by sale, gift, or otherwise from the Directors and Officers of
the Company.
The discussion of dilution below and the accompanying tables do
not reflect the impact of this agreement on public investors, which the
Company believes is favorable since, in the event of liquidation, the
rights of the creditors would be superior to those of the shareholders,
there is no assurance that any assets would be available to the
shareholders in such an event.
Dilution and Other Comparative Data
As of the date of this PROSPECTUS, the Company had a total of
shares of Common Stock issued and outstanding. The Net Tangible Book
Value of the Company's Common Stock as reflected on the Company's
December 31, 1999 compiled financial statement was $.0038 Per share.
Assuming the sale of shares offered hereby, a total of shares would
have been outstanding at such date, and the net tangible book value on
such date would have been approximately $.02. This represents an
immediate increase in the net tangible book value of $.008 Per share.
"Dilution per share" represents the difference between the price per
share paid by new public investors and the net tangible book value per
share at December 31, 1999, adjusted to give the effect of this
offering.
The following table illustrates the per share dilution in net
tangible book value as described above.
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Assuming Assuming
Sale of % Sale of %
13,750 625,000
Shares Shares
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Price to Public $8.00 100 $8.00 100
Net tangible book value
(before offering) .005 .005
Increase attributes to
purchase of the shares
by new investors .008 .02
Pro forma net book value
(after offering) .008 .02
Dilution to new investors -$7.99 -99.9 -$7.98 -99.9
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OWNERSHIP BY PRESENT SHAREHOLDERS AND PUBLIC INVESTORS
Upon completion of this offering, public investors will own
625,000 shares of Common Stock for which they paid an aggregate
consideration of $5,000,000 at $8 per share. These shares represent
less than 1% of the number of shares outstanding. The present
shareholders own 100% of the number of shares outstanding. The present
shareholders own 329,700,221 shares for which they paid an average of
$.003 per share. These shares will represent approximately 99% of the
total number of shares of Common Stock outstanding following the
completion of this offering.
Public Offering Price $8.00
Average Amount Paid by
Existing Shareholders $.003
Difference -$7.99
Purchasers of stock in this offering will invest $5,000,000 if
all the shares offered for sale are purchased. Upon completion of the
offering, if all shares are sold, the Officers and Directors will own
approximately 98% of the Company's outstanding Common Stock. The public
will own less than 2% of the Company's outstanding Common Stock.
Therefore, the investment of the public investors and risk borne by
them will be substantially greater in proportion to the percentage of
the Company owned by them than will be the investment of the Directors
and the Executive Officers.
The following table sets forth, on a pro forma basis as of the
date of the Preliminary Prospectus, a comparison of (i) the number of
shares of Common Stock acquired from the Company by investors prior to
the offering and acquired from the Company by the pre-offering
stockholders of the Company, (ii) the total consideration paid to the
Company and (iii) the respective average purchase price per share paid
by the investors and the pre-offering stockholders.
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Shares Total Average
Purchased Consideration Price
Number Percent Amount Percent Per Share
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Current
Stockholders 329,700,221 98% 1,250,000 20% $.0038
New stockholders 625,000 2% 5,000,000 80% $ 8.00
Total 330,325,000 100% 6,250,000 100%
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PLAN OF DISTRIBUTION
The Company is offering to sell up to 625,000 shares at a price of $8
Per share. The shares will be offered and sold directly by the Company
through the sole efforts of the Company's management. William L.
Robinson, Jr., Chairman & CEO, R. Benjamin Dawson, MD, President and
Martha E. Robinson, Secretary & Director of Internet Services will
conduct the offering on behalf of the Company without separate
compensation. No underwriter, broker or dealer has been retained or is
under any obligation to purchase any shares.
The Company intends to contact prospective investors through
direct contact. The promotional efforts will invite persons interested
in the offering to obtain a copy of the Preliminary Prospectus by
downloading it from a World Wide Web site on the Internet or by
contacting the Company for a printed copy. The Company may also contact
additional potential investors by direct mail solicitation.
There is no established public market of the shares. The Company
intends to become a reporting company and file periodic reports with
the Securities and Exchange Commission pursuant to the Securities Act
of 1934. The Company also plans to establish a secondary public market
for its shares for the benefit of its shareholders by obtaining a
listing on the Nasdaq OTC - BB stock exchange. It is possible that the
Company will not be successful in these efforts to provide liquidity to
investors and that an active secondary market in the shares will not
develop. Upon successful completion of this offering and after
qualification by the States Attorneys General's Offices, the Company
will apply for a listing on the NASDAQ OTC - BB.
The Company intends to register with the appropriate State
Attorney's Generals and the S&P Corporate Visibility Program for "Blue
Sky" coverage throughout the United States.
DISTRIBUTION
The shares of Common Stock are being offered by the Directors and
Officers who will not receive any commissions from the sale thereof.
The shares of Common Stock are being offered to the public by the
Company when, as and if received by it, subject to the prior sale, to
withdrawal of the offer without notice, to the approval of counsel and
to certain other conditions.
UNDERWRITER'S AGREEMENT
Under certain Circumstances the Company may agree to enter into
an Agreement with an Underwriter retaining them as a financial
consultant for the duration of this offering from the date hereof,
pursuant to which they will receive fees aggregating to 10%, which will
be payable in full at closing.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
The Company was recently formed (see "The Company", "Risk
Factors", "Dilution", and "Capitalization"). Without a successful
offering, the Company will not have the financial resources required to
accomplish its purposes (see "Use of Proceeds"). The Company has no
alternative source of liquidity other than this offering and its
current cash assets.
The Company has made no material commitments for capital
expenditures. The Company is solely dependent upon the successful
offering of these shares as its source of funds required to market the
AMERICA TEST and other patented technologies (see "Use of Proceeds").
The Company may consider the possibility of offering additional shares
for sale to the public at some time in the future. Any such additional
offering would be dependent upon the Company's assessments of a number
of factors including the need for additional funding, current economic
and market conditions and the market demand for the shares.
The Company intends to enter into goal-oriented performance
contracts with scientists and physicians from the University of
Maryland Medical System for patient care and much of its product
development activities, upon successful completion of this offering.
The Company believes that during this period there will be no
significant adverse impact from inflation and changing prices on the
Company's operation (see "Business of the Company").
BUSINESS OF THE COMPANY
General
As soon as practicable after the Break Escrow Point has been
achieved the principal activities of the Company following this
offering will be to:
(1) Relocate corporate headquarters and provide working capital
and salaries,
(2) Establish a budget for a cancer patient progress monitoring
project at the University of Maryland Medical System and other
nationally ranked medical institutions for single patient
protocols using proprietary biomarkers of pre-neoplastic or early
malignant transformation with data delivered over proprietary
laboratory information systems (LIS),
(3) Engage a Corporate Investors Services Company for listing
for "Blue Sky" registration throughout the United States,
(4) Sign Market Maker Agreements with a registered security
firms to obtain a listing with the Nasdaq OTC - BB Stock Exchange
for trading of the Company's Capital Stock, and
(5) Enforcement of the Company's intellectual property rights.
The Company knows of no currently available products or
technologies similar to the AMERICA TEST or the Bactobridge and
knows of no other Company engaged in the research or development
of a similar product or technology.
OPERATIONS AND ASSUMPTIONS
First and Second Years of Operations
Our first two years of operations has consisted primarily of
organizing the Board of Directors, selecting executive officers and
signing Proprietary Information Agreements (PIA) with corporations,
i.e., the InterContel Telecommunication Corporation and the Laboratory
Corporation of America.
On November 15-16, 1999, the National Medicare Laboratory and
Diagnostic Services Panel concluded that a group of laboratory tests
known as human tumor assay system (such as the AMERICA TEST showed
clinical utility.
Third Year of Operations
The third year began with the authorization to use the AMERICA
TEST( at the University of Maryland Medical System), (2) the
development and marketing of the AMERICA TEST including the Bactos),
(3) creation of a laboratory information system designed as a cancer
patient database consisting [primarily] of patients using proprietary
biomarkers of pre-neoplastic or early malignant transformation at the
Sinai Hospital of Baltimore and (4)the licensing of other pathogen
reduction and DNA identification technologies for use in the field of
pharmacogenomics. Plans are also currently underway to establish a
cancer drug-testing program (with scientists from the University of
Maryland School of Medicine) using federally licensed and patented
technologies.
Incidence of Cancer in the Mid-Atlantic Region
The Surveillance, Epidemiology and End Result (SEER) Program of
the National Cancer Institute collects and publishes cancer incidence
and survival data from population cancer registries covering
approximately 14 percent of the U.S. population. The "High Five States"
including the District of Columbia, Delaware, Maryland and New Jersey
had the highest average annual age adjusted cancer mortality rates in
the U.S. between 1989-1993.
Products and Services
1. Clinical Laboratory and Diagnostics Services
a) Introducing the AMERICA TEST - "A Human Tumor Assay System"),
including the BACTOBRIDGE.
-------------------------------------- -------------------------------
- - - -
- AMERICA TEST - - PC-BASED BACTOBRIDGE -
- - - -
- Testing for life threatening - - -
- diseases just got simpler. - - -
- - - -
- A Human Tumor Assay System - - -
- - - -
- A malignant cancer cell detection, - - -
- enrichment, metabolic monitoring, - - , -
- DNA Identification and quantum - - Photo Taken at DMRT -
- drug analysis system. - - University. of Maryland -
- - - School Of Medicine -
-------------------------------------- -------------------------------
AMERICA TEST - Testing for life threatening diseases just got simpler.
A computerized human tumor assay system for malignant cancer cell
detection, enrichment, metabolic monitoring, DNA identification and
quantum drug analysis. In the past, typical tests (i.e., prostate
specific antigen, circulating epithelial, breast, lung and colorectal)
detect antigens which are not present until a tumor is large and in an
advanced state (1,2). Today, circulating tumors of various origin have
been enriched using immunomagnetic assays (3,4). Detection is possible,
even if the tumor is as few as one cell per one hundred million normal
cells (5,6). At the pathology bench, a Pathologist will assess specimen
adequacy. If after all tissue requirements for routine pathologic
evaluation have been fulfilled and excess tumor is present, tumor cell
metabolism of samples [obtained from: 1) fresh biopsy specimens of
human neoplasms or 2) established cultured cell lines] will be
monitored in PC-based Bactobridge laboratory instruments utilizing the
OncoWatch software program. The pre-clinical and pre-therapeutic
analysis of tumor cell responses to specific anti-cancer drugs is the
principle attribute of the Bactobridge. These general purpose clinical
laboratory instruments have been cleared by the FDA (510K #936123) and
used to calculate, determine and observe quantal dose responses from
standard chemotherapeutic agents, i.e., Flurouracil, 8-Azaguanine and
BCNU, etc., against human tumors in vitro, within minutes (7,8).
Restriction enzymes will be used for genetic analysis of genomic DNA.
This proprietary enzyme technology has been used for the genetic
identification of the subtypes of the human immunodeficiency virus
HIV (13). Therapeutic treatment can be monitored with de novo
synthesized antigenic biomarkers. The immunogenic and antigenic
determinants of synthetic peptides and their corresponding antigenic
determinants in the parent protein have been elucidated. Some of these
changes show promise as biomarkers of preneoplastic development or for
early malignant transformation (14-17). Identification of drugs that
selectively inhibit the growth of particular cancer cells, from
individual patients, may be developed (18).
References:
1. Brandt et al., Isolation of Prostate derived Single Cells
and Cell Clusters from Human Peripheral blood, Cancer Research
56, 4556-4561 (1996).
2. Dynal Co., M-450; Immunomagnetic beads, Cellpro, Inc.,
Bothell, WA, PMA Number: BP-940001 (1996) and Nexell
Therapeutics, Inc., Irvine, CA, PMA Numbers BP970001 &
BP970001/01 (1999).
3. HCPCS #G0107 - Colorectal, ICD-9 CM -V76-V76.9 - Breast and
Cervix, ICD-9 CM - 233.4 In Situ Prostate Carcinoma and CPT
#78810 (1999).
4. Molenhauer et al., Epithelium-specific surface glycoprotein
of Mr 34,000 is a widely distributed human carcinoma marker,
Br. Journal of Cancer Vol. 56: 714-721 (1987).
5. Miltenyi et al., Immunomagnetic enrichment of disseminated
epithelial tumor cells from peripheral blood by MACS., Exp.
Hematology 26: 252-264 (366).
6. Kruger et al., Detection of Micrometastatic Cancer Cells
With and Without Immunomagnetic Enrichment, Bone Marrow
Transplantation, Vol. 27, Suppl 7, Abstract 640 (BBMT-Miehly).
7. Dawson et al., AMERICA TEST - A malignant cancer cell
detection, enrichment, metabolic monitoring, DNA identification
and quantal drug analysis test [U.S. Patent Pending Serial No.
09/425882 (1999)].
8. Warburg, Otto, On the Origin of Cancer Cells, Science; Vol.
123, No. 3191, 309-314 (1956).
9. Wahl et al., Lung Cancer Reproducibility of Quantitative
Measurements for Evaluating 2-[F-18]-Fluro-2-deoxy-D-glucose
Uptake at PET, Radiology, Vol. 196 167-173 (1995) CPT Code
#88310.
10. "Pre-Therapeutic In Vitro (Individualized Patient) Anti-
Cancer Drug(s) Response Measurements Using the Bactobridge"
[University of Maryland Institutional Review Board (IRB)
Exemption No. #EA-039801, Assurance No. M1174-01NR (3/26/98)].
11. "A Clinical Trial Project" [a collaboration between the
U.S. Harvest Medical Technologies Corporation
(http://www.ushmedtech.com) (a Hartech Corporation) and the
Department of Medical and Research Technology (DMRT),
University of Maryland School of Medicine].
12. Ommaya et al., An electrical impedance method for rapid
measurement of tumor cell sensitivity to anti-cancer drugs.
Exptl. Clinical Res. VII (5) 641-647 (NIH-1981).
13. Hsu et al., Method for identifying a nucleotide base pair
at a point mutation site in a DNA target using a mismatch
repair enzyme - US Patent #5683877, CPT Code #88248 (1997).
14. Wilson et al., The structure of an antigenic determinant
in a protein, Cell 37: 767-778 (1984).
15. Kolodziej et al., Epitope Tagging and Protein
Surveillance, Methods in Enzymology, Vol. 194: 508-517 (1991).
16. Evans et al., Isolation of Monoclonal Antibodies Specific
for Human c-myc Proto-Oncogene Product, Molecular and Cellular
Biology, Vol. 5, No.12: 3610-3616 (1985).
17. Bogoch et al., Detection of malignant tumor cells - U.S.
Patents #5866690, 4298590 & 4486538, CLIA #22D0650367, CPT Code
86317.
18. Monks et al., Methods for identifying drugs with selective
effects against cancer cells, U.S. Patent #5645988.
b) Methods of Identifying Drugs With Selective Effects Against
Cancer Cells
The present invention involves a method of identifying drugs
which selectively inhibit the growth of particular cancer cells,
which method comprises: (a) contacting with the drug at least two
cancer cells derived from the same type of biological material,
wherein the cancer cells differ as to the presence of a particular
DNA sequence, (b) measuring the effect of the drug on the growth of
the cancer cells, and (c) determining whether there is a
correlation between the effect of the drug on the cancer cells and
the presence or absence of the DNA sequence in the cancer cells.
The present invention further involves the use of such drugs.
2. Cancer Patient Progress Monitoring
In addition to their role in cancer diagnosis, some tumor marker
levels are measured before treatment to help doctors plan appropriate
therapy. Biomarkers hold the promise of predicting disease
predisposition, providing early measures of drug efficacy and safety
and identifying appropriate treatments for certain patient populations.
a) Detecting Cancer and Determining the Organ-Origin of the
Cancer.
The present application describes a highly sensitive assay for
distinguishing between cancer and non-cancer epithelial cells in
the blood. It provides an improved diagnostic technique for
detecting cancer and determining the organ-origin of the cancer.
This assay can be used to prove the neoplastic nature of cells and
predict when shed tumor cells have or will become metastatic. A
major advantage of the present invention is that tumor cells can
also be recovered as viable cells and can be kept alive in vitro
for a sufficient period of time to determine the effect (AMERICA
TEST) of particular anti-tumor pharmaceuticals on the cells.
Furthermore, the assay provides an early detector of treatment
success or failure and thereby allows a treatment regimen to be
customized for an individual patient with advanced primary cancer.
b) Prostate Cancer
This monoclonal antibody technology is capable of binding to a
cell surface differentiation antigen specific for prostate
adenocarcinomas and other prostate cancer cells. Accordingly,
methods of therapy can be employed with this monoclonal antibody to
destroy prostate cancer cells, and hence, this monoclonal antibody
may be useful in therapy and/or the diagnosis of prostate cancer.
c) Hepatocellular Carcinoma
Hepatocellular carcinoma is a liver cancer, which has high
levels of incidence in Asian populations, e.g., China, Korea.
Incidence of hepatocellular carcinoma is greater among chronic
carriers of hepatitis. A transforming sequence or oncoprotein,
hhc(SUP)M has been identified which is the amplified gene
expression product of hepatoma. Antibodies to the hhc(SUP)M product
or the cDNA itself can be used for diagnostic, therapeutic, and
screening tests.
3. Pharmacogenomics (DNA Recognition).
a) Restriction Enzymes
Restriction enzymes acquired from the University of Maryland
will be used for genetic analysis of genomic DNA. This proprietary
enzyme technology has been used for the genetic identification of
the subtypes of the human immunodeficiency virus (HIV). The
technology can be useful in the detection of genetic disease,
cancer and genetic variability such as normal polymorphisms.
Detection of mismatches can occur also by determining the presence
of enzyme-nucleic acid complexes, for example, by analysis on a
native gel, gel retardation assay, essentially as described in
Fried & Crothers (Nucl Acids Res. (1981) 9, 6505-6526).
DNA Mutation Detection Tools
The mutation scanning system utilizes DNA mismatch repair
enzymes to identify the type and location of mutations within DNA
sequences up to 1kb long, without requiring DNA sequencing.
The Company is developing a database of single-letter
variations- single nucleotide polymorphisms (SNPs) in hope of
selling the data to pharmaceutical companies. To locate the SNPs, a
mismatch enzyme called Hsu-vase scans the selected genes. It cuts
the DNA when it finds a nucleotide that differs from a reference
sequence. Using this data will allow investigators to glean the
genetic profile of patients who experience ill effects from a drug.
b) Tissue Microarray For Rapid Molecular Profiling
Recent advances in molecular medicine have provided new
opportunities to understand cellular and molecular mechanisms of
disease and to select appropriate treatment regimens with the
greatest likelihood of success. The clinical application of novel
molecular, genetic and genomic discoveries has been impeded by the
slow and tedious process of evaluating biomarkers in large numbers
of clinical specimens. The present invention provides a method of
high-throughput molecular profiling of very large numbers of tissue
specimens, such as tumors, with minimal tissue requirements. This
procedure provides a target for rapid parallel analysis of
biological and molecular characteristics from hundreds of
morphologically controlled tumor specimens. Multiple sections can
be obtained from such tissue microarrays (tissue chips) so that
each section contains hundreds or thousands of different tissue
specimens that maintain their assigned locations. Different in situ
analyses, such as histological, immunological, or molecular, are
performed on each section to determine the frequency and
significance of multiple molecular markers in a given set of
tissues.
This method can also be combined with other technologies such
as high-throughput genomics surveys using DNA microarrays. DNA
microarrays enable analysis of thousands of genes from one tissue
specimen in a single experiment, whereas the tissue microarrays
make it possible to analyze hundreds or thousands of tissue
specimens in a single experiment using a single gene or protein
probe (i.e. Hsu-vase). Together the DNA and tissue microarray
technologies will be very powerful for the rapid analysis of
markers associated with disease prognosis or therapy outcome.
c) Ratio-Based Decisions and the Quantitative Analysis of cDNA
Microarray Images
The present invention relates to the quantitative analysis of
gene expression by hybridizing fluor-tagged mRNA to targets on a
cDNA microarray. A method and system of image segmentation is
provided to identify cDNA target sites. The comparison of gene
expression levels arising from cohybridized samples is achieved by
taking ratios of average expression levels for individual genes. A
confidence interval is developed to quantify the significance of
observed differences in expression ratios. This technology has been
implemented into a computer program called ArraySuite and provides
a user-friendly display for the operator to view and analyze the
results of the experiment.
d) A Universal Protein Array System
The Universal Protein Array (UPA) system is a newly developed
research tool for the analysis and screening of potential drug
targets. This technology uses the three-dimensional structure of
active proteins (without denaturation and renaturation) to
determine specific protein-protein, protein-DNA, protein-RNA, and
protein-ligand or protein-chemical interactions. Unlike most
conventional DNA chips or DNA microarrays currently on the market,
the UPA system requires no sophisticated equipment and is in fact
more sensitive than existing methods. The UPA system is able to
analyze thousands of protein samples in a single experiment,
thereby making it a highly efficient way to screen proteins for
potential drug targets. Also, because it can be used multiple times
for different targets, it is economically affordable for most
laboratories or hospitals. In addition to being useful as a
screening tool, the UPA system can also be used to study gene
regulation pathways such as transcription, RNA processing,
replication, translation, and signal transduction to name a few.
The technology found in the UPA system could also potentially be
commercialized in a kit form and be applied to the diagnosis of
disease states in patients in the clinical setting.
4. Information Systems Network
The Company plans to use the Internet and electronic commerce
technology for 1) medical billing, 2) to distribute the test results
obtained from the Bactobridge and 3) to provide access to both the
tissue microarrays and the Universal Protein Array (UPA) system
databases. This will be facilitated through a strategic alliance with
the Intercontinental Telecommunication Corp. (a Hartech Company).
Potential subscribers to the WWW-based client information systems
network includes: (1) medical foundations, hospital-controlled and
clinic-controlled organizations, (2) university researchers (3)
pharmaceutical companies, (4)) medical device manufacturers, (5) health
care insurers, and (6) regulating government agencies.
PATENT RIGHTS In the United States, although a patent has a
statutory presumption of validity, the issuance of a patent is not
conclusive as to such validity or as to the enforceable scope of the
claims therein. Nevertheless, the Company has several patents currently
pending on all products and processes, including with the Patent
Cooperative Treaty ("PCT").
BOARD OF SCIENTIFIC ADVISORS
A special element in the Company's development has been its
utilization of a Board of Scientific Advisors composed of prominent
scientists and medical doctors. It consists of 5 members, 4 of whom
have Ph.D. or MD or PE degrees and who serve as professors at or
directors of major educational and research institutions.
The Company plans to offer attractive compensation, incentives
and fringe benefits programs, including equity participation
opportunities for key scientific and management personnel, which is
important for both recruiting and retaining such personnel.
The consulting scientific and technical advisors to the Company
along with their principally related skills and most recent
accomplishments are listed below.
Roy Ben Dawson, MD - Professor of Pathology, University of
Maryland School of Medicine, Director of the Blood Research
laboratories - Chairman of the Board of Scientific Advisors and
President.
Ih-Chang Hsu, PhD, Professor of Pathology and Oncology,
University of Maryland School of Medicine is Principal Investigator for
enzyme induction and DNA identification experiments using genetically
altered restriction enzymes.
Denise M. Harmening, Ph.D. MT (ASCP), CLS (NCA), Chairperson for
the Department of Medical and Research Technology, University of
Maryland School of Medicine along with Edgar Alonsozana, M.D. is Co-
Principal Investigator for the proposed Cancer Clinical Trial Project
Titled: "Pre-Therapeutic In-Vitro Anti-Cancer Drug Response
Measurements using the Bactobridge". She has shown an interest in
becoming the Co-Principal Investigator for the Cancer Drug(s) Screening
Project Titled: "Evaluation of Chemopreventive Agents by In-Vitro
Techniques".
Ann Hamburger, PhD, Professor of Pathology and Oncology,
University of Maryland School of Medicine has agreed to become a
Laboratory Consultant for the Cancer Clinical Trial Project Titled:
"Pre-Therapeutic In-Vitro Anti-Cancer Drug Response Measurements using
the Bactobridge".
Amirum Ur, MD - Co-Inventor of the impedance based technologies.
Clive Mott, PE - The senior design engineer of the Bactobridge and
advisor to the Board of Scientific Advisors.
Christopher F. Frampton, Eur., Ing - Managing Director of SNS
Bioengineering, Ltd., Member of the Board of Directors.
Barry J. Belcher - Instructor (retired) of Aeronautical
Engineering and Aerodynamics, Imperial College of Medicine, Science and
Technology in London and a senior design engineer of the Bactobridge
and advisor to the Board of Scientific Advisors.
Byron S. Tepper, Ph.D. - Former Associated Professor at the Johns
Hopkins University School of Medicine and its affiliated Medical
Institutions and Chief Biosafety consultant to Hartech.
MANAGEMENT
The Directors and Executive Officers of the Company are as
follows:
Name Age Position
William L. Robinson, Jr. 51 Chairman of the Board of
Directors & CEO
R. Benjamin Dawson, MD 65 President and a Director
Martha E. Robinson 53 Corporate Secretary
John R. Hurtt 52 Chief Information
Officer and a Director
Frances M. Dawson 58 Director
Christopher F. Frampton, Eur. Ing 52 Director
Raymond K. Robinson 36 Director
Robert F. Dashiell, Esq. 53 Special Counsel
William L. Robinson, Jr., Chairman of the Board of Directors and
Chief Executive Officer, is a founder and has been with the Company
since its inception. Although working for the Company, he is the
Chairman & CEO of the Hartech Corporation, a Maryland Corporation. Mr.
Robinson has over two decades of biomedical research experience in the
sciences involving the stimulation of the natural immune system through
the induction of human interferons, the electro-biophysics of human
tumor cells and pathogenic microorganisms and the reconstitution of
nutritional deficiencies in shellfish after irradiation processing. Mr.
Robinson successfully co-authored the Company's application [510-(k)
96123] presented to the FDA for the use of electrical impedance
technologies for obtaining rapid antibiotic, chemosensitivity and tumor
cell analyses. He is co-author of several patents pending. He received
his education in the biomedical sciences at major American Universities
including the University of Wisconsin (Madison) and the Johns Hopkins
University and is a former member of the Atomic Industrial Forum, the
American Society for the Testing of Material (ASTM) and Who's Who in
Science and Technology. Mr. Robinson devotes his full time to the
affairs of the combined Companies.
Roy Ben Dawson, MD, President of the Company and Chairman of the
Board of Scientific Advisors has been with the Company since its
inception. In addition to working for the Company he is the President
of the Hartech Corporation, a Maryland Corporation. Dr. Dawson is a
fully trained internist specializing in medicine and hematology and a
full professor of pathology. He is certified in transfusion medicine.
Dr. Dawson devotes his full time to the affairs of the combined
Companies.
John R. Hurtt, Chief Information Officer and a Director has been
with the Company since its inception. Mr. Hurtt is an senior engineer
with over 28 years of applied knowledge in the health sciences with a
specialty in medical diagnostic digital imaging systems. He is the co-
author of the Company's intellectual property and its FAP petition. He
is licensed under the Code of Maryland Regulation (COMAR) 26.12.01.01
B.5 (Application for registration of services and servicing Service -
Registration Number 019-02 - Radiation Machine Program, State of
Maryland, Department of the Environment) and has performed engineering
duties in various modalities, including radiology, radiation therapy,
cardio-vascular, neuroangio and ultrasound. Prior to working for the
Company he was the acting Chief Information Officer of the Hartech
Corporation, a Maryland Corporation for the past 10 years. Mr. Hurtt
devotes his full time to the affairs of the combined Companies.
Martha Elaine Robinson, Corporate Secretary/Treasurer and a
Director has been with the Company since its inception. Mrs. Robinson
was a former Employer for the Md. Court System for over a decade. Prior
to working for the Company she was the acting Corporate Secretary and
Vice President of Internet Services of the Hartech Corporation, a
Maryland Corporation for the past 10 years. Mrs. Robinson devotes her
full time to the affairs of the combined Companies.
Frances M. Dawson, a member of the Board of Directors is
currently and has been for the past 23 years the director and conductor
of the Columbia Pro Cantare Chorus in Columbia, Maryland.
Christopher F. Frampton, Eur. Ing., is the European member of the
Company's Board of Directors and currently the managing partner for the
SNS Bioengineering Corporation in London England.
Raymond K. Robinson is a Director of the Company.
Robert F. Dashiell, Esq., Special Counsel. Mr. Dashiells
currently practices law in the State of Maryland and have done so for
over 20 years of specializing in securities and corporate law.
FAMILY RELATIONSHIPS
William L. Robinson, Jr. is married to Martha E. Robinson. They
are the Sister and Brother in Law of John R. Hurtt and Raymond K.
Robinson. Frances M. Dawson is married to R. Benjamin Dawson, M.D.
REMUNERATIONS
The Directors and Executive Officers are the only individuals who
will receive any remunerations for services rendered. Immediately after
this offering, the Company will enter into a consulting contract to
procure the services of Robert F. Dashiell, Edward S. Blanton, Esq. and
Byron S. Tepper's services for three years at an undetermined annual
cost (see "Risk Factors" - "Dependence Upon Key Personnel").
The Company has also entered into employment contracts with:
-----------------------------------------------------------------------
W.L. Robinson, Jr. 150,000 Chairman of the Board of
Directors and CEO
R. Benjamin Dawson, M.D 175,000 President and Chairman
of the Board of
Scientific Advisors
John R. Hurtt 115,000 Chief Information
Officer
M.E. Robinson 100,000 Corporate Secretary
and Treasurer
-----------------------------------------------------------------------
All salaries were effective January 1, 1998. After the Company
have had gross revenues from all sources of $5,000,000 or two years
after the effective date of this offering, whichever first occurs, the
Company's Board of Directors may increase all salaries and consulting
fees. The Executive Officers of the Company will devote the majority of
their time to the affairs of the Company.
The Company has the right, under the existing contracts to
discontinue payments to the Directors and Executive Officers, if they
abandon the development of the aforementioned projects. The Directors
and the Executive Officers have agreed that, if less than the maximum
number of shares offered hereby are sold, they will defer payment of so
much of the amount due them under their respective contracts as may be
necessary in order to enable the Company to fund the expenses of the
Company's manufacturing and marketing goals.
Upon completion of this offering, the Company expects to pay
remunerations during 2000-2001 of approximately $540,000 to its
Officers and Directors as a group, including Dr. Dawson, W.L. Robinson,
Jr., J.R. Hurtt and M.E. Robinson. Outside directors, if any were
elected, would be paid Directors fees. In addition to the fees and
salaries stated above, employees will be eligible to receive such
additional bonuses, fringe benefits and other forms of remuneration,
which may be determined from time to time by the Company's Board of
Directors.
Directors Compensation
Directors who are employees of the Company do not receive
compensation for serving as directors. The Company anticipates
compensating its independent directors for their services in the form
of fees and/or stock options, yet to be determined. All directors will
be reimbursed for their out of pocket expenses incurred in connection
with attending meetings of the Board of Directors and for other
expenses incurred in their capacity as directors of the Company.
PROMOTERS OF THE COMPANY
W.L. Robinson, Jr., prior to this offering owns approximately 39%
of the Company's Common Stock, R. Benjamin Dawson, MD, owns
approximately 11%, John R. Hurtt owns approximately 7%, M.E. Robinson
owns approximately 6% and Spencer L. McCain owns approximately 5%, all
may be deemed promoters of the Company.
Escrow Account
Until the minimum offering amount or $110,000 has been accepted
and received by the Company all proceeds will be held in an escrow
account at the Mercantile Safe Deposit and Trust located in Baltimore,
Maryland. Once the Break Escrow Point is reached, the funds will be
released to the Company from the escrow account by the Escrow Agent.
If, the minimum Offering amount has not been reached by the end
of the Offering period (as the same may have been extended) no
interests will be issued and each share purchased will be refunded,
without interest.
PRINCIPAL SHAREHOLDERS
The following table lists the number of shares of the Company's
Common Stock beneficially owned by all persons known to the Company to
be beneficially owners of (approximately) five (5%) percent or more of
the Company's Common Stock, and by all directors and officers of the
Company individually and as a group, prior to this offering, and the
percentages of all outstanding shares held by such persons (A) prior to
this offering; (B) assuming the minimum 13,750 number of shares are
sold and (C) assuming all 625,000 shares are sold.
Company Stockholdings
-----------------------------------------------------------------------
Name of Number Prior to Assuming Assuming
Beneficial Owner of Shares Offering Minimum Maximum
Sold Sold
-----------------------------------------------------------------------
W.L. Robinson, Jr.,
2517 Quantico Avenue,
Baltimore, MD 21215 128,628,717 39% 39% 39%
R. Benjamin Dawson
5404 Iron Pen Place
Columbia, MD 21114 35,793,950 11% 11% 11%
J.R. Hurtt
5962 Green Meadow Pkwy
Baltimore, MD 21209 22,388,000 7% 7% 7%
M.E. Robinson 2517
Quantico Avenue
Baltimore, MD 21215 20,971,000 6% 6% 6%
Spencer L. McCain
3319 Rogers Avenue
Baltimore, MD 21215 12,025,000 5% 5% 5%
Hartech Corporation
and Other Directors/
Officers as a group 48,750,000 15% 15% 15%
-----------------------------------------------------------------------
CAPITALIZATION
Set forth below is the Capitalization of the Company at January
1, 2000 and as adjusted on that date for the issuance and sale of the
minimum of 13,750 shares of Common Stock and the issuance and sale of
625,000 shares of Common Stock, the maximum.
-----------------------------------------------------------------------
Title of Class As of December 13,750 625,000
31, 1999 Shares Sold Shares Sold
-----------------------------------------------------------------------
Term Debt $ 0 $ 0 $ 0
Current Liabilities $ 0 $ 0 $ 0
TOTAL INDEBTEDNESS $ 0 $ 0 $ 0
Common Stock, $.0038 par
value, 375,000,000 shares
Authorized, 329,700,221
Outstanding shares after
the offering (1). $1,250,000 $110,000 $5,000,000
Capital Stock (2) 329,700,221 329,810,221 30,325,221
Capital in excess
of par value $1,250,000 $2,000,000 $6,250,000
Deficit $500,627 $500,627 $500,627
Less Treasury Stock 0 0 0
-----------------------------------------------------------------------
TOTAL STOCKHOLDER'S EQUITY
On December 31, 1999 the net tangible book value (tangible assets
minus all liabilities) of the Company was $.0038 per share of Common
Stock. If the minimum number of shares Common Stock (13,750) offered
hereby had been sold on that day, and the proceeds of the sale had been
treated, as stockholder's equity the net tangible book value of the
Company's Common Stock would have been $.005 per share. Net tangible
book value per share is determined by dividing the number of shares of
Common Stock outstanding into the Company's tangible net worth
[tangible assets excluding assets deducted from shareholder's equity
(See "Liabilities")].
BUSINESS STRATEGY - PLAN OF OPERATION
The Company's plan of operations following this offering will be to:
(1) Relocate corporate headquarters and provides working capital
and salaries,
(2) Establish a budget for a cancer patient progress monitoring
project at the University of Maryland Medical System and other
nationally ranked medical institutions for single patient protocols
using proprietary biomarkers of pre-neoplastic or early malignant
transformation with data delivered over proprietary laboratory
information systems (LIS),
(3) Engage a Corporate Investors Services Company for listing for
"Blue Sky" registration throughout the United States,
(4) Sign Market Maker Agreements with registered Security firms to
obtain a listing with the Nasdaq OTC - BB Stock Exchange for trading of
the Company's Capital Stock, and
(5) Enforcement of the Company's intellectual property rights.
DESCRIPTION OF THE COMPANY'S OPERATING AGREEMENT
Government Regulation
On May 24, 2000 the Company's Regulation A Registration Statement
presented to the Securities and Exchange Commission became effective.
On April 24, 2000 the first stage of an assay designed to detect
and monitor surrogate biomarkers of early malignant transformation was
performed at the Sinai Hospital of Baltimore.
On April 18, 2000 the Company signed an Agreement with the
Department of Health and Human Services (DHHS) to use patented
technology developed by the National Cancer Institutes for use in the
field of Pharmacogenomics.
On February 7, 2000 the Company received authorization to begin
using the AMERICA TEST in the University of Maryland Medical Systems.
From December 27 - 30, 1999, the Company participated in genetic
engineering experiments along with Senior Scientist from the Department
of Pathology at the University of Maryland School of Medicine aimed at
commercialization of restriction enzyme technologies.
On November 16, 1999, the National Medicare Laboratory and
Diagnostic Service Panel concluded that a group of clinical laboratory
tests known as human tumor assay systems such as the AMERICA TEST show
clinical utility.
On November 4, 1999 the Company signed an Agreement with the
Office of Research Development at the University of Maryland in
Baltimore to sponsor the Re-issue and legal defense of patented
biologic technologies developed in the Department of Pathology of the
School of Medicine of the University of Maryland.
From June 2, 1998 thru February, 1999 the Company (under the
direction of University of Maryland Scientist) conducted accuracy and
performance tests with live bacterial and human cancerous tissue in the
Bactobridge at the Beta Testing facility at the University of Maryland
in Baltimore.
On March 26, 1998, the Institutional Review Board for the
University of Maryland approved the Company's protocol for the use of
the Bactobridge for tumor response tests to be performed at the
Department of Medical and Research Technology (DMRT) at the University
of Maryland School of Medicine.
On July 2, 1997, the Company received authorization from the
Maryland Medical Care Policy Administration of the Department of Public
Health and Mental Hygiene for reimbursement for the use of the
Bactobridge.
On September 18, 1996, the registration for the manufacture and
distribution of the Bactobridge became effective - O/O #9010416.
In April 1996, the Company received clearance from the FDA to
manufacture and market the Bactobridge to clinical laboratories,
nationwide (510 (k) #936123).
On March 29, 1996 the President of the United States announced
the Federal Cancer Initiative, which allows expanded access for
individual cancer patents to single patient protocols.
DESCRIPTION OF CAPITAL STOCK
Common Stock
The authorized capital of the Company includes 375,000,000 shares
of Common Stock, par value $.0038 per share, of which 329,700,221
shares were outstanding as of January 1, 2000. All outstanding shares
are fully paid and non-assessable. The holders of the Company's Common
Stock are entitled to one vote per share, to receive such dividends as
legally may be declared by the Board of Directors, and upon
liquidation, to receive any net assets of the Company after the
liquidation and rights of preferred stock shareholders if any, have
been satisfied. There are no pre-emptive, conversion, cumulative
voting, or redemption rights applicable to the Common Stock. The
Directors and Executive Officers have entered into an agreement with
the Company restricting their dividends and liquidation rights (see
"Dilution").
Penny Stock Regulations
Although it is uncertain whether the Company's Common stock will
be listed on a national or regional stock exchange such as the NASDAQ
OTC - BB Stock Exchange or whether broker dealers will make market in
the Company's stock, if the Company is listed with a national or
regional stock exchange or quotation system and broker dealers do buy
and sell the Company's stock, then certain penny stock regulations
could affect the sale of the stock if the stock price falls below $5.
These regulations require broker dealers to disclose the risk
associated with buying penny stock and to disclose their compensation
for selling the stock. Such regulations may have the effect of reducing
the levels of trading activity and the secondary market for the
Company's stock and make it more difficult for investors to sell the
stock. (Rule 15(g); Penny Stock Disclosure General Rule and Regulations
promulgated under the Securities and Exchange Act of 1934).
Possible Delisting of Securities.
Prior to this Offering, there has been no established trading
market for the Company's Securities and there is no assurance that a
trading market for such Securities will develop after the completion of
this Offering. The Company will seek a presence on the Nasdaq OTC -
electronic bulletin board (BB). This is to provide liquidity. If a
trading market does in fact develop for the Securities offered hereby,
there could be no assurance that it will be sustained, nor that an
active secondary market in the shares will develop.
Offering Period.
The Offering will remain open until November 4, 2000, the date
which is 90 days after the date of this Preliminary Prospectus;
provided however, that such Offering period may be extended by the
Company, in its sole and absolute discretion, for up to an additional
90 days.
Transfer Agent and Registrar
The Securities Transfer Co. has been selected as the Transfer
Agent and Registrar of the Company's Common Stock; 2591 Dallas Parkway
Suite 102, Dallas Texas 75034.
Shareholder Report
The Company will distribute to shareholders annual reports when
they become due along with audited financial statements.
Dividends
The Company has never declared any dividends (see "Risk Factors"
- "No Dividends Paid").
Conflict of Interest
None. However to avoid conflicts of interest all employment and
consultant agreements carry legal disclaims of non-competition, which
if necessary, would be enforced by the Company. No policies, procedures
or practices have been adopted by the Company to reduce or avoid
potential conflicts other than that described above.
LEGAL EXPERTS
Legal matters in connection with a review of the organization of
the Company has been passed upon by Robert Fulton Dashiell, Esq.,
P.A., 813 E. Baltimore, Street, Baltimore, Md. 21202.
Accounting Experts
Accounting matters in connection with the financial organization
of the Company have been passed upon by the accounting firm of Booth
Consulting, LLC, 10045 Red Run Blvd., Owings Mills, Maryland 21117
Properties
Company's office is located at One East Chase Street, Baltimore,
Maryland 21209. Upon successful completion of this offering, the
Company intends to lease/purchase additional modest office and
executive housing facilities in the Baltimore metropolitan area.
EMPLOYEE INCENTIVE COMPENSATION PLAN
The Board of Directors contemplates an Employee Incentive
Compensation Plan (the "Incentive Plan"), which includes the award of
bonuses to Officers of the Company. All employees of the Company are
eligible to receive bonuses under the Incentive Plan upon the
authorization of the Board of Directors. Bonuses are based on the
achievement of the Company's goals and objectives as determined by
management and the Board of Directors.
Employee Stock Plan
A Total of 1,500,000 shares of Common Stock are presently
reserved for issuance under the Company's Employee Stock Plan, which
was adopted by the Board of Directors and approved by the shareholders
in July, 1998. The Employee Stock Plan, which is intended to qualify
under Section 423 of the Internal Revenue Code of 1954, as amended, is
administered by the Board of Directors. Employees of the Company
(including officers) are eligible to participate if they are
customarily employed by the Company 20 hours or more per week and more
than five months per year, under the Plan, participating employees may
receive rights to purchase Common Stock in such amounts and for such
prices (not less than 85% of the fair market value of the shares on the
date of grant of the right to purchase shares under the Plan or the
date of purchase) as may be established by the Board of Directors, and
may pay for shares purchased under the Plan by means of regular payroll
deductions, lump sum cash payments or a combination of both as
determined by the Board of Directors. No single purchase right granted
to an individual employee under the Employee Stock Plan may cover more
than 25,000 shares and no more than 100,000 shares may be purchased by
all participating employees under the Plan during any single calendar
quarter. Employees may end their participation in the Plan at any time
and participation ends automatically on termination of employment.
To date, no shares have been offered or sold under the Employee
Stock Plan, but the board of directors has authorized two types of
grants. Initially, employees will be eligible to receive a right to
purchase 500,000 shares of Common Stock each at a price of 85% of the
price of the shares offered hereby. These rights will be exercisable by
each participating employee on the date of the offering covered hereby,
with payment due on or before July 1, 2000. On an ongoing basis,
employees will receive the grant of a right to purchase Common Stock
with up to 10% of the participating employee's basic compensation (up
to Plan maximums) at a price of 85% of lesser of (a) the fair market
value of Common Stock on the date of grant and (b) the fair market
value of the Common Stock on the date of exercise. The rights will have
a term of 24 months and will generally be automatically exercisable on
each January 1st, July 1st and October 1st unless the participant has
terminated his employment or withdrawn from Plan prior to such date.
For new employees, grants of rights under the Plan will be on the first
grant date following employment by the Company. Grant dates will occur
on the date of the offering of the shares covered hereby and on the
first day of each ensuing January, April, July and October. Only newly
eligible employees will receive grants so long as participants hold a
previously granted right, but a participant who has voluntarily
withdrawn from the Plan will be eligible to receive a new grant on the
next grant date.
Indemnification of Officers and Directors
The Maryland General Corporation Law contains various provisions
entitling directors, officers, employees or agents of the Company to
indemnification from judgments, fines, amounts paid in settlement and
reasonable expenses, including attorney's fees, as the result of an
action or proceeding (whether civil, criminal, administrative or
investigative) in which they may be involved by reason of being or
having been a director, officer, employee or agent of the Company
provided said persons acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interest of the Company
(and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that the conduct complained of was
unlawful). The By-laws of the Company provide that the indemnification
provisions of any applicable law are to be utilized to the fullest
extent permitted.
Limitation on liability of Directors
The Maryland General Corporation Law permits a corporation,
through its certificate of Incorporation, to exonerate its directors
from personal liability to the corporation, or to its stockholders, for
monetary damages for breach of fiduciary duty of care as a director,
with certain exceptions. The exceptions include a breach of the
director's duty of loyalty, acts or omissions not in good faith or
which involve intentional misconduct or knowing violation of law,
improper declarations of dividends, and transactions from which the
directors derived an improper personal benefit. The Company's
Certificate of Incorporation exonerates its directors from monetary
liability to the extent permitted by this statutory provision. The
Company has been advised that it is the position of the Securities and
Exchange Commission that insofar as the foregoing provision is against
public policy as expressed in the Act and is therefore unenforceable.
INTEREST IN CERTAIN TRANSACTIONS
Within the last year there have not been any transactions of the
Company in which a director, nominee to become a director, principal
security provider, or relative or spouse of any person in which such
person had or is to have a direct or indirect material interest.
LITIGATION
There is no litigation pending to which the Company is a party.
FURTHER INFORMATION
The Company has filed with the Securities and Exchange
Commission, Washington, DC, a registration statement (together with all
amendments called the "Registration Statement") with respect to the
securities offered by this Preliminary Prospectus. This Preliminary
Prospectus does not contain all the information set forth in a Small
Offering Registration Statement, certain parts of which were omitted in
accordance with the rules and regulations of the Commission. For
further information about the Company and the securities offered by
this Preliminary Prospectus reference is made to the Registration
Statement, including the exhibits and financial statement. Each
statement in this Preliminary Prospectus referring to a document has
been filed as an exhibit for a complete statement of its terms and
conditions. Copies of the exhibits are on public file at offices of the
Securities and Exchange Commission in Washington, DC, and may be
obtained from the Commission upon payment of prescribed fees.
No dealer, salesman or any other person has been authorized to give any
information or to make any representations not contained in this
Preliminary Prospectus in connection with the offering made hereby,
and, if given or made, such information or representation must not be
relied upon as having been authorized by the Company, or any
underwriter or broker/dealer, Neither the delivery of this Preliminary
Prospectus nor any sale made hereunder shall, under any circumstances,
create any implication that the information contained herein is correct
as of any date subsequent to the date hereof or that there has been no
change in the affairs of the Company since the date hereof. This
Preliminary Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy by any person in any jurisdiction in
which such offer or solicitation is not authorized or in which the
person making such offer or solicitation is not qualified to do so or
to anyone to whom it is unlawful to make such offer or solicitation in
such jurisdiction.
Until November 4, 2000 (90 days after the date of the Final
Prospectus) all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be
required to deliver a Prospectus in this distribution. This is in
addition to the obligation of dealers to deliver a Final Prospectus
when acting as underwriters and with respect to their unsold allotments
or subscriptions.
TABLE OF CONTENTS Page #
Preliminary Prospectus ..................... 3
Preliminary Prospectus Summary ............. 3
The Company ................................ 3
The Offering ............................... 4
Risk Factors ............................... 5
Terms of the Offering ...................... 8
Use of Proceeds ............................ 8
Dilution ................................... 11
Ownership by Present Shareholders
And Public Investors ....................... 12
Plan of Distribution ....................... 13
Distribution ............................... 13
Underwriters Agreement ..................... 14
Management's Discussion
and Financial Condition .................... 14
Business of the Company .................... 14
Operations and Assumptions ................. 15
Board of Scientific Advisors ............... 21
Management ................................. 22
Family Relationships ....................... 23
Remunerations .............................. 23
Promoters of the Company ................... 25
Principal Shareholders ..................... 25
Capitalization ............................. 26
Business Strategy -
Plan of Operation .......................... 27
Description of the
Company Operating Agreement ................ 27
Description of Capital Stock ............... 28
Legal Experts .............................. 30
Employee Incentive Compensation Plan ....... 30
Interest in Certain Transactions ........... 32
Litigation ................................. 32
Further Information ........................ 32
Financial Statements ....................... F1
ITEM 2. Financial Statements
U. S. HARVEST MEDICAL
TECHNOLOGIES CORPORATION
(A Development Stage Enterprise)
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
DECEMBER 31, 1999
U. S. HARVEST MEDICAL
TECHNOLOGIES CORPORATION
(A Development Stage Enterprise)
FINANCIAL STATEMENT
TABLE OF CONTENTS
INDEPENDENT ACCOUNTANTS' COMPILATION REPORT 1
BALANCE SHEET 2
STATEMENT OF OPERATIONS 3
STATEMENT OF CASHFLOWS 4
NOTES TO FINANCIAL STATEMENTS 5-7
Stockholders and Board of Directors
U. S. Harvest Medical Technologies Corporation
Baltimore, Maryland
We have compiled the accompanying balance sheet of U. S. Harvest
Medical Technologies Corporation as of May 31, 2000 and the related
statements of operations, retained earnings and cash flow for the five
months then ended, in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of
Certified Public Accountants.
A compilation is limited to presenting in the form of financial
statements information that is the representation of management. We
have not audited or reviewed the accompanying balance sheet and,
accordingly, do not express an opinion or any other form of assurance
on it.
As more fully described in Note 3 to the financial statements several
of the Board of Directors of U. S. Harvest Medical Technologies
Corporation are also Board members of Hartech Corporation. The Board
of Directors of the Hartech Corporation have contributed 8,000,000
shares of their stock with a stated value of $.54 as equity in U. S.
Harvest Medical Technologies Corporation.
June 12, 2000
U. S. HARVEST MEDICAL
TECHNOLOGIES CORPORATION
(A Development Stage Enterprise)
BALANCE SHEET
AS OF MAY 31, 2000
SEE INDEPENDENT ACCOUNTANTS' COMPILATION REPORT
ASSETS NOTE(S)
Cash 1 $ 23,655
Marketable securities 2 4,320,000
Research and development, net
Of accumulated amortization of
$280,887 at May 31, 2000 1 532,718
Organizational cost, net of accumulated
amortization of $2,687 at May 31, 2000 1 6,798
Computers, net of accumulated depreciation
Of $2,597 at May 31, 2000 1 2,903
Laboratory equipment, net of accumulated
Depreciation of $93,215 at May 31, 2000 1 235,785
TOTAL ASSETS $5,121,859
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable 437,236
Total Liabilities 437,236
STOCKHOLDERS' EQUITY
Common stock, 375,000,000 authorized
329,000,000 issued and outstanding,
$.0038 stated value 1,250,000
Contributed capital 3 4,146,361
Deficit accumulated during the
development stage 1 (711,738)
Total Stockholders' Equity 4,684,623
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $5,121,859
See accompanying notes to financial statements.
U. S. HARVEST MEDICAL
TECHNOLOGIES CORPORATION
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
FOR THE FIVE MONTHS ENDED MAY 31, 2000
SEE INDEPENDENT ACCOUNTANTS' COMPILATION REPORT
REVENUE NOTE(S)
Sales $ -
Total Revenue $ -
OPERATING EXPENSES
Salaries, wages and related taxes 131,019
Amortization expense 49,219
Depreciation expense 28,179
Professional fees 2,500
Office supplies 139
Bank service charges 55
Travel expense -
Total expenses 211,111
Net Loss $ (211,111)
RETAINED EARNINGS, Beginning of Year (500,627)
RETAINED EARNINGS, End of Year $ (711,738)
See accompanying notes to financial statements.
U. S. HARVEST MEDICAL
TECHNOLOGIES CORPORATION
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
FOR THE FIVE MONTHS ENDED MAY 31, 2000
SEE INDEPENDENT ACCOUNTANTS' COMPILATION REPORT
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (211,111)
Adjustments to reconcile net
Loss to net cash provided by
operating activities: -
Depreciation expense 28,179
Amortization expense 49,219
Increase in accounts payable 131,619
NET CASH FLOWS PROVIDED
BY OPERATING ACTIVITIES $ (2,094)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of machinery and equipment -
Research and development -
Organizational cost -
Investment in marketable securities -
NET CASH FLOWS APPLIED
BY INVESTING ACTIVITIES -
CASH FLOWS FROM FINANCING ACTIVITIES
Contributed capital $ 25,000
NET CASH FLOWS PROVIDED BY
FINANCING ACTIVITIES $ 25,000
NET INCREASE IN CASH $ 22,906
CASH BALANCE AT BEGINNING OF YEAR $ 749
CASH BALANCE AT END OF YEAR $ 23,655
See accompanying notes to financial statements.
U. S. HARVEST MEDICAL
TECHNOLOGIES CORPORATION
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2000
Note 1 -Summary of Significant Accounting Policies
This summary of significant policies of U. S. Harvest Medical
Technologies Corporation is presented to assist in the understanding of
the Company's financial statements. The financial statements and notes
are representations of the Company's management who is responsible for
their integrity and objectivity. These accounting policies conform to
generally accepted accounting principles and have been consistently
applied in the preparation of the financial statements.
Business Description
U. S. Harvest Medical Technologies Corporation, a development stage
enterprise, is a physician controlled organization providing
comprehensive laboratory equipment and services. The equipment and
services are designed to detect the quantal drug responses of human
neoplasia and the presence of foodborne as well as the variations of
hematopoetic malignant disease causing microorganisms, i.e. HIV, in
human beings. The Company is currently pursuing a Regulation A
Circular Offering with the Securities Exchange Commission.
During its developmental stage, the company has focused on the
development of its technologies and the competitive and regulatory
environment in which the Company will operate. To date, the company
has marketed and tested the Bactos in independent clinical laboratories
across the country including the National Institutes of Health ("NIH").
The Bactos, the America Test and the related software have received
AMA, Medicaid and FDA clearance for rapid antibiotic analysis and tumor
and chemosensitivity testing.
Basis of Presentation
The Company prepares its financial statements on the accrual basis of
accounting, which recognizes income when earned and expenses when
incurred.
Cash and Cash Equivalents
For purposes of the statements of cash flows, cash equivalents include
demand deposits, time deposits, certificate of deposits, and highly
liquid debt instruments with original maturities of three months or
less. At May 31, 1999, the Company's cash items are its time deposits
(savings account) and demand deposits (checking account).
U. S. HARVEST MEDICAL
TECHNOLOGIES CORPORATION
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2000
Property and Equipment
Property and equipment are recorded at cost. Expenditures for
maintenance and repairs are charged against operations; renewals and
betterments that materially extend the life of the asset are
capitalized. Gains or losses on dispositions of property are included
in operations in the year of disposal. Depreciation is computed on the
straight live basis over the estimated useful lives of the assets.
Management's policy is to capitalize all purchases over $1,500.
Depreciation and Amortization
The cost of property, plant and equipment is depreciated over the
estimated useful lives of the related assets. Depreciation is computed
on the straight-line basis for both financial reporting purposes and
income tax purposes.
At May 31, 2000, the estimated useful life of the assets for purposes
of computing depreciation is:
Computers and equipment 3 years
Laboratory equipment 5 years
Intangible assets are depreciated over the estimated useful life of the
asset. Amortization is computed on the straight-line basis for both
financial reporting purposes and income tax purposes.
At May 31, 2000, the estimated useful life of the intangible assets for
purposes of computing depreciation is:
Research and Development cost 3 years
Organizational cost 5 years
Use of Estimates
Management's estimates are used in the preparation of these financial
statements in conformity with generally accepted accounting principles.
U. S. HARVEST MEDICAL
TECHNOLOGIES CORPORATION
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2000
Income Tax Provision
The company has a loss carry forward of ($500,627) at December 31, 1999
that can offset future taxable income through 2014.
Note 2 - Marketable Securities
The Company has 8,000,000 shares of stock in Hartech Corporation, a non
public corporation specializing in medical technology and research. The
stock has a stated value of $.54. As of the date of these financial
statements, no fair market value quote was available for the stock. In
such, the aggregate fair market value of the stock is $4,320,000 at
$.54 per share. The stock is not traded publicly.
Note 3 - Contributed Capital (Related Party Transaction)
U. S. Harvest Medical Technologies Corporation has the same majority
stockholders as Hartech Corporation. Hartech Corporation contributed
8,000,000 shares of stock at, $.54 stated value, as an initial capital
infusion for United States Harvest Medical Technologies Corporation.
Note 4 - General Notes
On April 25, 2000, U.S. Harvest Medical Technologies Corporation signed
an Agreement with The Office of Technology Transfer of the NIH to
license certain patents developed by the agencies of the U.S.
Government for use in the field of Pharmacogenomics, cancer diagnosis
and treatment and patient progress monitoring.
On April 25, 2000, the Director of U.S. Harvest Medical Technologies
Corporation authorized the NevWest Securities Corporation to file the
Form 15C-211 on behalf of the Company for NASDAQ registration.
On April 26, 2000, the Board of Directors of U.S. Harvest Medical
Technologies Corporation voted to authorize the "in-sourcing" of a
Chief Financial Officer.
On May 24, 2000, the Company's Regulation A registration statement
presented to the SEC became effective.
EXHIBIT INDEX
Exhibit Exhibit
Number Description
----------------- -----------------------
1. Underwriting Agreement - none
1a. Signature Page
2. Charter and By-Laws
3. Instruments Defining the Rights of Security Holders -
Specimen Stock Certificate
4. Subscription Agreement - none
5. Voting Trust Agreement - none
6. Material Contracts
6a.1. Hartech Corporation - Exclusive License Agreement
AMERICA TEST - Clinical laboratory instrument and
enzyme tests; (Human Tumor Assay System)
6a.2. Food and Drug Administration - 510 (k) #936123;
[Clearance] for the use of Bactobridge Clinical
laboratory Instruments
6a.3. American Medical Association - License for use of
[CPT] codes with the BactoWatch software
6a.4. University of Maryland Institutional Review Board
Agreement (IRB)
6a.5. University of Maryland - Testing Agreement
6a.6. University of Maryland - Confidential Document
6a.7. University of Maryland - Option Agreement
6a.8. Employment Agreements
a. William L. Robinson, Jr.,
Chief Executive Officer
b. R. Benjamin Dawson, M.D.
President
c. John R. Hurtt
Chief Information Officer
d. Martha Elaine Robinson
Corporate Secretary
6b. none
6c. Management Contracts - None
7. Material U.S. Patent(s)
7a. U.S. Patent Application #09/426/641
7b. U.S. Patent #05,645,988
8. Material Foreign Patent(s) None
9. Plan of Acquisition, Reorganization, Arrangement, Liquidation, or
Succession - none
10. Escrow Agreements
10a. Mercantile Safe Deposit and Trust Company
11. Consents
11a. Experts:
11a.1 Consent of Independent Public Accountants
Booth Accounting, P.C.
11a.2 Samuel Khoury, Ph.D. - Appraiser
11b. none
12. Opinion re-legality - Robert Fulton Dashiell, Esquire
13. Sales Material - Any material required to be filed by virtue of
Rule 256
14. "Test the Water" Material - Tombstone
15. Appointment of Agent for Service of Process - none
16. Additional Exhibits
- State of Maryland, Medical Care Policy
Administration; Department of Health and Mental
Hygiene - Approval
Proprietary Information Agreement (PIA) with
LabCorp., Inc.
Proprietary Information Agreement (PIA) with
InterContinental Telecomunications Corp.
(InterContel)
Employee Incentive Compensation Plan
Stock Registrar and Transfer Agent Agreement*
Standard and Poors Investor Relations Services*
