SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934.
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
[ ] Definitive Information Statement.
NUMED SURGICAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as specified in its Charter)
None.
- --------------------------------------------------------------------------------
(Name of person(s) Filing Information Statement, if Other Than the Registrant)
Payment of filing fee (check the appropriate box):
[ ] No fee required.
[X] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock, par value $.001 per share
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
2,400,000 shares
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
$.0547 per share; Based on Total Assets of acquired company
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
$131,428.00
- --------------------------------------------------------------------------------
(5) Total fee paid:
$26.29
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
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NUMED SURGICAL, INC.
7270 Sawgrass Point Drive
Pinellas Park, Florida, 33782
December ___ , 1998
Dear Shareholder:
On behalf of the Board of Directors, you are cordially invited to
attend a Special Meeting of the Shareholders of NuMed Surgical, Inc., ("NuMed")
to be held at the offices of Schifino & Fleischer, P.A., One Tampa City Center,
201 North Franklin Street, Suite 2700, Tampa, Florida 33602, on [Day] December
___, 1998, at 9:30 a.m., local time.
As described in the enclosed Information Statement, Shareholders will
be asked to consider and vote upon a proposal to approve a one-for-fifty reverse
split of the NuMed Common Stock (the "Reverse Stock Split"). If the Reverse
Stock Split is approved, NuMed Shareholders will then be asked to consider and
vote upon a proposed merger (the "Merger") of Nutriceuticals.com Corporation, a
Florida corporation ("Nutriceuticals"), with and into NuMed, with NuMed as the
corporation surviving the Merger, pursuant to an Agreement and Plan of Merger,
dated November ___ , 1998, by and among NuMed and Nutriceuticals (the "Merger
Agreement"). The Merger Agreement provides that Nutriceuticals' shareholders
will receive, after consummation of the Reverse Stock Split, one (1) share of
the common stock, $.001 par value per share, of NuMed ("NuMed Common Stock") in
exchange for each issued and outstanding share of common stock, no par value per
share, of Nutriceuticals ("Nutriceuticals Common Stock").
Further information concerning the Merger is contained in the
accompanying Notice of Special Meeting and the Information Statement. The
Information Statement contains a detailed description of the Merger Agreement,
its terms and conditions, and the transactions contemplated thereby. PLEASE
REVIEW THESE MATERIALS CAREFULLY AND CONSIDER THOUGHTFULLY THE INFORMATION SET
FORTH THEREIN.
THE NUMED BOARD OF DIRECTORS BELIEVES THE REVERSE STOCK SPLIT AND THE
MERGER ARE IN THE BEST INTERESTS OF NUMED'S SHAREHOLDERS, HAS UNANIMOUSLY
APPROVED BOTH PROPOSALS, AND RECOMMENDS THAT THE SHAREHOLDERS OF NUMED VOTE
"FOR" APPROVAL OF THE REVERSE STOCK SPLIT AND THE MERGER AGREEMENT.
Your vote is important and NuMed's management team would greatly
appreciate your attendance at the Special Meeting. HOWEVER, WE ARE NOT ASKING
YOU FOR A PROXY, AND YOU ARE REQUESTED NOT TO SEND US A PROXY. If you do attend
the Special Meeting, you may vote in person. I look forward to seeing you at the
Special Meeting of Shareholders, and I sincerely hope you will be able to
attend.
Very truly yours,
Jugal K. Taneja
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
<PAGE>
NUMED SURGICAL, INC.
7270 SAWGRASS POINT DRIVE
PINELLAS PARK, FLORIDA, 33782
----------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER ___ , 1998
----------
To the Shareholders
of NuMed Surgical, Inc.:
NOTICE IS HEREBY GIVEN that a special meeting of shareholders (the
"Special Meeting") of NuMed Surgical, Inc., a Nevada corporation ("NuMed"), will
be held at the offices of Schifino & Fleischer, P.A., One Tampa City Center, 201
North Franklin Street, Suite 2700, Tampa, Florida 33602, on December ___ , 1998,
at 9:30 a.m., local time, for the following purposes:
(1) To consider and vote upon a proposal to reduce the number
of outstanding shares of the common stock, par value $.001 per share,
of NuMed ("NuMed Common Stock"), through a one- for-fifty reverse split
of such outstanding shares (the "Reverse Stock Split"); and if
applicable,
(2) To consider and vote upon a proposal to adopt the
Agreement and Plan of Merger dated as of November ___ , 1998 (the
"Merger Agreement") by and between Nutriceuticals.com Corporation
("Nutriceuticals") and NuMed, pursuant to which Nutriceuticals will be
merged with and into NuMed (the "Merger"), with NuMed as the
corporation surviving the Merger, and in which (i) each issued and
outstanding common share of Nutriceuticals will be converted into one
(1) share of NuMed Common Stock, (ii) NuMed's corporate name will be
changed to "Nutriceuticals.com Corporation," and (ii) the officers and
directors of Nutriceuticals will become the officers and directors of
NuMed after the Merger.
(3) To transact such other business as may properly come
before the Special Meeting or any adjournments or postponements
thereof.
The Reverse Stock Split and the Merger are more completely described in
the accompanying Information Statement and a copy of the Merger Agreement is
attached thereto as Appendix B.
Action may be taken on the foregoing proposals at the Special Meeting.
Only holders of record of NuMed Common Stock at the close of business on
November ___ , 1998, are entitled to receive notice of, and to vote at, the
Special Meeting or any adjournments or postponements thereof.
By Order of the Board of Directors
/s/ Jugal K. Taneja
Jugal K. Taneja,
CHAIRMAN OF THE BOARD
Pinellas Park, Florida
November ___ , 1998
<PAGE>
INFORMATION STATEMENT
OF
NUMED SURGICAL, INC.
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON
DECEMBER ___ , 1998
----------
This Information Statement is being furnished by the Board of Directors
(the "NuMed Board of Directors" or the "NuMed Board") of NuMed Surgical, Inc., a
Nevada corporation ("NuMed"), to the shareholders of NuMed ("NuMed
Shareholders"), in connection with the special meeting of the NuMed Shareholders
(the "Special Meeting") to be held on December ___ , 1998 at the offices of
Schifino & Fleischer, P.A., One Tampa City Center, 201 North Franklin Street,
Suite 2700, Tampa, Florida 33602, and any adjournment or postponement thereof.
At the Special Meeting NuMed shareholders will be asked to consider and
vote upon a proposal to approve a one-for-fifty reverse split (the "Reverse
Stock Split") of the NuMed common stock, par value $.001 per share (the "NuMed
Common Stock"). The proposed Reverse Stock Split would have the effect of
reducing the number of outstanding shares of NuMed Common Stock, but would not
reduce the total number of authorized shares of NuMed Common Stock from the
existing 20,000,000 shares or change the par value of the NuMed Common Stock. No
scrip or fractional shares certificates for NuMed Common Stock will be issued in
connection with the proposed Reverse Stock Split, but in lieu thereof all
fractional shares will be rounded up to the nearest whole share. As of November
___ , 1998, the number of shares outstanding of NuMed Common Stock was
8,775,685. As a result of the Reverse Stock Split there will be approximately
175,500 shares of NuMed Common Stock outstanding. The purpose of the proposed
Reverse Stock Split is to prevent a significant increase in the number of
outstanding shares which would otherwise result from the proposed merger
transaction described below. If the Reverse Stock Split is consummated, you will
be informed of the time and method of effecting the exchange of your old stock
certificates for new stock certificates. PLEASE DO NOT SEND ANY STOCK
CERTIFICATES AT THIS TIME.
If the Reverse Stock Split is approved at the Special Meeting, NuMed
shareholders will also be asked to consider and vote upon a proposal to approve
an Agreement and Plan of Merger dated as of November ___, 1998 (the "Merger
Agreement") by and between Nutriceuticals.com Corporation, a Florida corporation
("Nutriceuticals"), and NuMed, providing for the merger (the "Merger") of
Nutriceuticals with and into NuMed, with NuMed being the corporation surviving
the Merger. Upon consummation of the Merger and the Reverse Stock Split, each
issued and outstanding common share, no par value, of Nutriceuticals
("Nutriceuticals Common Stock") will be converted into the right to receive one
(1) share of NuMed Common Stock, which is expected to result in the issuance to
2,400,000 shares or approximately ninety-three percent (93%) of the then
outstanding shares of NuMed Common Stock, on a post-Reverse Sock Split basis
(the "Merger Consideration"). A copy of the Merger Agreement is attached hereto
as Appendix B and is incorporated herein by reference.
The Merger Consideration was not determined in an arm's length
negotiation between the parties to the Merger because the parties are affiliated
corporations having overlapping Boards of Directors and principal shareholder.
In addition, the aggregate fair market value of the Merger Consideration is not
readily ascertainable given the fact that the shares of NuMed's Common Stock are
not actively traded, and that
<PAGE>
Nutriceuticals is a recently formed privately held company. An outside financial
advisor was not engaged to ascertain the value of the Merger Consideration.
The affirmative vote of a majority of all the votes entitled to be cast
at the Special Meeting by the holders of the issued and outstanding NuMed Common
Stock is required to adopt the Merger Agreement. In order to take action on the
Reverse Stock Split, and on any other matter submitted to shareholders at the
Special Meeting, the votes cast in favor of the action must exceed the votes
cast opposing the action. Directors and officers of NuMed and their affiliates
own 2,542,491 shares of NuMed Common Stock, representing approximately 28.97% of
the outstanding shares of NuMed Common Stock. Such persons intend to vote their
shares of NuMed Common Stock in favor of the Merger and the Reverse Stock Split.
The shareholders of Nutriceuticals have unanimously approved the Merger.
THE NUMED BOARD OF DIRECTORS BELIEVES THE REVERSE STOCK SPLIT AND THE
MERGER ARE IN THE BEST INTERESTS OF NUMED'S SHAREHOLDERS, HAS UNANIMOUSLY
APPROVED BOTH PROPOSALS, AND RECOMMENDS THAT THE SHAREHOLDERS OF NUMED VOTE
"FOR" APPROVAL OF THE REVERSE STOCK SPLIT AND THE MERGER AGREEMENT.
All information set forth in this Information Statement with respect to
NuMed has been furnished by NuMed, and all information set forth herein with
respect to Nutriceuticals has been furnished by Nutriceuticals. This Information
Statement is first being mailed to the NuMed Shareholders on or about November
___ , 1998. NuMed will bear the costs of preparing, assembling and mailing the
Information Statement.
The date of this Information Statement is November ___, 1998.
<PAGE>
TABLE OF CONTENTS
PAGE NO.
--------
SUMMARY OF INFORMATION STATEMENT..........................................1
The Meeting...........................................................1
The Reverse Stock Split...............................................2
The Merger............................................................4
Summary of Comparative Financial Data.................................8
THE SPECIAL MEETING OF THE SHAREHOLDERS OF NUMED.........................10
General Information..................................................10
Record Date and Voting Rights........................................10
PROPOSAL I - PROPOSAL TO EFFECT A ONE-FOR-FIFTY REVERSE SPLIT OF
THE OUTSTANDING SHARES OF NUMED COMMON STOCK...........................11
Reasons for the Proposed Reverse Stock Split........................11
Principal Effects...................................................11
Fractional Shares...................................................12
Exchange of Stock Certificates......................................12
Effective Date......................................................12
Federal Income Tax Consequences.....................................12
Dissenters' Rights..................................................13
Vote Required.......................................................13
PROPOSAL II - THE MERGER................................................14
Description of the Merger...........................................14
Effective Time of the Merger........................................14
Background of the Merger............................................15
Reasons for the Merger and Recommendation of the NuMed Board........15
Conditions Precedent to the Merger..................................17
Modification, Waiver and Termination................................17
Federal Tax Consequences............................................17
Interests of Certain Persons in the Merger..........................18
Certain Effects of the Merger on the Rights of NuMed and
Nutriceuticals Shareholders........................................19
Accounting Treatment................................................19
Restrictions on Resales of NuMed Common Stock Issued in the Merger..19
Expenses ...........................................................19
Rights of Dissenting Shareholders...................................19
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS................................................21
MANAGEMENT...............................................................22
Directors and Executive Officers of NuMed...........................22
Directors and Officers of Nutriceuticals............................22
Proposed Officers and Directors of Surviving Corporation............23
Director Meetings and Committees....................................24
COMPENSATION OF EXECUTIVE OFFICERS.......................................24
Summary Compensation Table..........................................24
OTHER MATTERS............................................................24
APPENDIX A...............................................................F-1
APPENDIX B...............................................................B-1
i
<PAGE>
SUMMARY OF INFORMATION STATEMENT
THE FOLLOWING IS A BRIEF SUMMARY OF CERTAIN INFORMATION SET FORTH
ELSEWHERE IN THIS INFORMATION STATEMENT AND IS NOT INTENDED TO BE COMPLETE. IT
SHOULD BE READ IN CONJUNCTION WITH, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO, THE MORE DETAILED INFORMATION CONTAINED ELSEWHERE IN THIS
INFORMATION STATEMENT AND THE ANNEXES HERETO. SHAREHOLDERS OF NUMED ARE URGED TO
READ THIS INFORMATION STATEMENT AND THE ANNEXES HERETO IN THEIR ENTIRETY.
CERTAIN STATEMENTS CONTAINED IN THIS INFORMATION STATEMENT ARE "FORWARD
LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995, SUCH AS STATEMENTS RELATING TO FINANCIAL RESULTS, PLANS FOR
FUTURE BUSINESS DEVELOPMENT ACTIVITIES, CAPITAL SPENDING OR FINANCING SOURCES,
CAPITAL STRUCTURE AND THE EFFECTS OF REGULATION AND COMPETITION AND ARE THUS
PROSPECTIVE. SUCH FORWARD LOOKING STATEMENTS ARE SUBJECT TO RISKS, UNCERTAINTIES
AND OTHER FACTORS WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
FUTURE RESULTS EXPRESSED OR IMPLIED BY SUCH FORWARD LOOKING STATEMENTS.
POTENTIAL RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO, ECONOMIC
CONDITIONS, COMPETITION AND OTHER UNCERTAINTIES DETAILED FROM TIME TO TIME IN
NUMED'S FILINGS WITH THE COMMISSION.
THE MEETING
Date, Time and
Place of Meeting................. A Special Meeting of the shareholders of
NuMed will be held on December , 1998,
at the offices of Schifino & Fleischer,
P.A., One Tampa City Center, 201 North
Franklin Street, Suite 2700, Tampa,
Florida, commencing at 9:30 a.m., local
time, and at any adjournment or
postponement thereof.
Record Date.......................... November ___ , 1998.
Securities Entitled To Vote.......... The holders of record at the close of
business on November ___ , 1998 (the "
Record Date") of shares of NuMed Common
Stock are entitled to notice of and to
vote at the Special Meeting.
Matter to be Considered.............. At the Special Meeting, Shareholders
will be asked to consider and vote on a
proposal to amend NuMed's Articles of
Incorporation to effect a one-for-fifty
reverse split of the issued and
outstanding shares of NuMed Common Stock
(the "Reverse Stock Split"); See,
PROPOSAL I - PROPOSAL TO EFFECT A
ONE-FOR-FIFTY REVERSE STOCK SPLIT OF THE
OUTSTANDING SHARES OF NUMED COMMON
STOCK.
If the Reverse Stock Split is approved
by the NuMed Shareholders, they will
then be asked to consider and vote on a
proposed Merger pursuant to which
Nutriceuticals will merge with and into
NuMed and Nutriceuticals' shareholders
will receive one (1) share of NuMed
Common Stock for each share of
Nutriceuticals' common stock
1
<PAGE>
owned. The Merger is to be effected
pursuant to a Merger Agreement which
contemplates the following related
transactions: (a) an amendment to
NuMed's Articles of Incorporation to
change the name of NuMed to
"Nutriceuticals.com Corporation"; and
(b) the election of four (4) directors
to serve as the directors of NuMed after
the Merger, until the next annual
meeting and until their successors are
elected and qualified. See, PROPOSAL II-
THE MERGER.
Required Vote....................... Each share of NuMed Common Stock will be
entitled to one (1) vote on each of the
proposals to be presented at the
Special Meeting.
In order to take action on the Reverse
Stock Split, and on any other matter
submitted to shareholders at a meeting
where a quorum is present (other than
the Merger), the votes cast in favor of
the action must exceed the votes cast
opposing the action. See, The Special
Meeting of the Shareholders of NuMed -
Record Date and Voting Rights. To
approve and adopt the Merger Agreement,
the affirmative vote of a majority of
all the votes entitled to be cast at the
Special Meeting by the holders of the
issued and outstanding NuMed Common
Stock is required to adopt the Merger
Agreement. See, THE SPECIAL MEETING OF
THE SHAREHOLDERS OF NUMED - RECORD DATE
AND VOTING RIGHTS.
Shares Owned by Directors
and Officers.................... The directors and executive officers of
NuMed and their affiliates beneficially
own approximately 28.97% of the shares
of NuMed Common Stock entitled to vote
at the Special Meeting. The directors
and executive officers of NuMed have
indicated their intention to vote such
shares "FOR" the adoption of the Merger
Agreement and the Reverse Stock Split.
See, THE SPECIAL MEETING OF THE
SHAREHOLDERS OF NUMED - RECORD DATE AND
VOTING RIGHTS, and PROPOSAL II - THE
MERGER - INTERESTS OF CERTAIN PERSONS IN
THE MERGER.
THE REVERSE STOCK SPLIT
Reasons for the
Reverse Stock Split............. The purpose of the proposed Reverse
Stock Split is to prevent a significant
increase in the number of outstanding
shares of NuMed Common Stock which could
occur as a result of the Merger, by
reducing the number of such shares
presently outstanding, and thereby
significantly reducing the number of
such shares to be issued in the Merger.
See,
2
<PAGE>
PROPOSAL I - PROPOSAL TO EFFECT A
ONE-FOR-FIFTY REVERSE STOCK SPLIT OF THE
OUTSTANDING SHARES OF NUMED COMMON STOCK
- REASONS FOR THE REVERSE STOCK SPLIT.
Principal Effects................... Based upon the number of shares of NuMed
Common Stock outstanding on November ___
, 1998, the proposed one-for-fifty
Reverse Stock Split would decrease the
outstanding shares of NuMed Common Stock
from 8,775,685 to approximately 175,500
shares, which will continue to be held
by NuMed's approximately 540
shareholders of record. See, PROPOSAL I
- PROPOSAL TO EFFECT A ONE-FOR-FIFTY
REVERSE STOCK SPLIT OF THE OUTSTANDING
SHARES OF NUMED COMMON STOCK - PRINCIPAL
EFFECTS.
Fractional Shares .................. No scrip or fractional shares for NuMed
Common Stock will be issued in
connection with the proposed Reverse
Stock Split. All fractional shares will
be rounded up to the nearest whole
share. See, PROPOSAL I - PROPOSAL TO
EFFECT A ONE-FOR-FIFTY REVERSE STOCK
SPLIT OF THE OUTSTANDING SHARES OF NUMED
COMMON STOCK - FRACTIONAL SHARES.
Exchange of Stock Certificates...... Holders of NuMed Common Stock will be
notified and requested to surrender
their old NuMed Common Stock
certificates for new certificates
representing the number of whole shares
of NuMed Common Stock after the Reverse
Stock Split. Shareholders should NOT
forward their certificates until they
receive a letter of instruction from the
Exchange Agent. See, PROPOSAL I -
PROPOSAL TO EFFECT A ONE-FOR-FIFTY
REVERSE STOCK SPLIT OF THE OUTSTANDING
SHARES OF NUMED COMMON STOCK - EXCHANGE
OF STOCK CERTIFICATES.
Effective Date...................... Following approval, the Reverse Stock
Split will become effective as of 5:00
p.m., E.S.T. on the date of the filing
of an amendment to NuMed's Articles of
Incorporation with the Department of
State of Nevada (the "Effective Date").
Federal Income Tax Consequences..... The Reverse Stock Split will qualify as
a tax-free recapitalization for NuMed
and the NuMed Shareholders. Shares of
NuMed Common Stock in the hands of a
NuMed Shareholder after the Reverse
Stock Split will have an aggregate basis
for computing gain or loss equal to the
aggregate basis of the shares of NuMed
Common Stock held by such shareholder
immediately prior to the proposed
Reverse Stock Split, increased by any
gain recognized from the rounding of
fractional shares to the nearest next
whole share. A NuMed Shareholder's
holding period for the
3
<PAGE>
NuMed Common Stock after the Reverse
Stock Split will not change. See,
PROPOSAL I - PROPOSAL TO EFFECT A ONE-
FOR-FIFTY REVERSE STOCK SPLIT OF THE
OUTSTANDING SHARES OF NUMED COMMON STOCK
- FEDERAL INCOME TAX CONSEQUENCES.
Appraisal Rights.................... Dissenting NuMed Shareholders have no
appraisal rights under Nevada law or
under NuMed's Articles or By-laws in
connection with the Reverse Stock Split.
THE MERGER
General............................. The Merger Agreement provides that
Nutriceuticals will be merged with and
into NuMed, with NuMed being the
surviving corporation of the Merger.
See, PROPOSAL II - THE MERGER -
DESCRIPTION OF THE MERGER.
Parties to the Merger:
NuMed...................... NuMed was organized in 1993 as a Nevada
corporation, and was engaged in the
health care industry until the fourth
quarter of its fiscal 1997, in which
NuMed sold its major product line to a
competitor. It liquidated the remaining
portions of the business in 1998. NuMed
currently has no business operations,
and has no material assets or
liabilities. NuMed files reports with
the Securities and Exchange Commission
pursuant to Section 12(g) of the
Exchange Act. The mailing address and
telephone number of the principal
executive offices of NuMed is 7270
Sawgrass Point Drive, Pinellas Park,
Florida, 33782, and (272) 524- 3227. For
additional information regarding NuMed
and the combined company that would
result from the Merger. See, PROPOSAL II
- THE MERGER - BACKGROUND OF THE MERGER.
Nutriceuticals............. Nutriceuticals is a development stage
company which was organized in Florida
in September 1998 to engage in the
Internet vitamin industry.
Nutriceuticals is presently developing
and Internet Website and a transaction
processing system to manage inventory,
orders and shipping. Nutriceuticals
estimates that such system will take
approximately sixty (60) days to
complete. Nutriceuticals believes that
online vitamin/nutriceuticals retailing
should gain increasing acceptance over
the next five (5) years and continue to
evolve. The mailing address and
telephone number of the principal
executive offices of Nutriceuticals is
6950 Bryan Dairy Road, Largo, Florida
33777, (813) 544-8866. See, PROPOSAL II
- THE MERGER - BACKGROUND OF THE MERGER.
4
<PAGE>
Common Management ......... NuMed has certain key relationships with
Nutriceuticals. A principal NuMed
Shareholder, Jugal K. Taneja, is also a
principal shareholder of Nutriceuticals.
In addition, Mr. Taneja is the Chairman
of the Board and Chief Executive Officer
("CEO") of NuMed and Nutriceuticals.
Pursuant to the Merger Agreement, the
officers and directors of Nutriceuticals
will become the officers and directors
of NuMed.
Reasons for Merger.................. In the fourth quarter of its 1997 fiscal
year, NuMed divested itself of its major
product line, and in fiscal 1998, it
liquidated its remaining assets. NuMed
presently has no material assets or
liabilities. In October 1998, due to the
relationship of the management of NuMed
and Nutriceuticals, consideration was
given as to combining the companies
through a merger. The Boards of each of
the companies unanimously approved the
Merger and Merger Agreement concluding
that the Merger is in the best interests
of the NuMed Shareholders based on
several factors including the following:
(i) the comparable balance sheets of the
parties; (ii) the future earning
prospects of Nutriceuticals and the
vitamin/nutriceutical industry; and
(iii) the relative advantages and the
risks of the Merger. See, PROPOSAL II -
THE MERGER - REASONS FOR THE MERGER AND
RECOMMENDATION OF THE NUMED BOARD.
Merger Consideration................ Nutriceuticals shareholders will receive
in the Merger, in exchange for each
issued and outstanding share of common
stock, no par value per share, of
Nutriceuticals ("Nutriceuticals Common
Stock"), one (1) share of NuMed Common
Stock, on a post-Reverse Stock Split
basis. The shares of NuMed Common Stock
to be received by Nutriceuticals
shareholders pursuant to the Merger
Agreement are referred to herein as the
"Merger Consideration." See, PROPOSAL II
- THE MERGER - REASONS FOR THE MERGER
AND RECOMMENDATION OF THE NUMED BOARD.
The Merger Consideration was not
obtained in an arm's length negotiation,
and the aggregate fair market value of
the Merger Consideration is not readily
ascertainable given the limited and
sporadic trading in NuMed Common Shares.
The NuMed Board did not obtain an
outside financial advisor to ascertain
the value of the parties, or the value
or fairness of the Merger Consideration.
See, PROPOSAL II - THE MERGER -
BACKGROUND OF THE MERGER; REASONS FOR
THE MERGER AND RECOMMENDATION OF THE
NUMED BOARD.
5
<PAGE>
Conversion of
Nutriceuticals Shares.......... Upon consummation of the Merger, all
outstanding shares of Nutriceuticals
Common Stock will cease to be
outstanding and will be converted into
the right to receive the Merger
Consideration.
Effective Date and Time............. Upon approval of the Merger Agreement by
the Shareholders at the Special Meeting,
and the satisfaction or waiver (where
permissible) of the other Merger
conditions, including the approval and
the consummation of the Reverse Stock
Split proposal, the Merger will be
consummated and become effective at the
time at which Articles of Merger meeting
the requirements of the Nevada General
Corporate Law (the "Nevada GCL") and
Articles of Merger meeting the
requirements of the Florida Business
Corporation Act ("FBCA") shall be
delivered to the Secretary of State of
Nevada and to the Secretary of State of
Florida, respectively, for filing, which
ever is later, (the time of such latter
filing being the "Effective Time" and
the day of such latter filing being the
"Effective Date"). It is expected that
the Effective Time will be promptly
following completion of the Special
Meeting. See, PROPOSAL II - THE MERGER -
EFFECTIVE TIME OF MERGER.
Dissenter's/Appraisal Rights........ Holders of NuMed Common Stock are
entitled to appraisal rights in
connection with the Merger under the
provisions of the Nevada GCL. Any NuMed
Shareholder who desires to exercise his
or her statutory dissenter's rights must
submit within twenty (20) days of
notice, a written demand for the payment
of his or her shares. NuMed Shareholders
who vote in favor of the Merger may not
exercise dissenter's rights. FAILURE TO
STRICTLY COMPLY WITH THE REQUIREMENTS OF
THE NEVADA GCL WILL RESULT IN THE LOSS
OF APPRAISAL RIGHTS. See, See, PROPOSAL
II - THE MERGER - RIGHTS OF DISSENTING
SHAREHOLDERS.
The obligation of NuMed to effect the
Merger is subject to the condition,
which it may waive, that the holders of
no more than five percent (5%) of the
NuMed Common Stock have duly demanded
appraisal of their shares at the time
the Merger is to be consummated. See,
PROPOSAL II - THE MERGER - CONDITIONS
PRECEDENT TO THE MERGER.
Federal Tax Consequences............ The Merger is expected to be a tax-free
reorganization within the meaning of
Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code").
Assuming that the Merger so qualifies,
no gain or loss will be recognized for
federal income tax purposes by holders
of
6
<PAGE>
NuMed Common Stock. No ruling will be
requested from the IRS as to the tax
status of the Merger. However, Schifino
& Fleischer, P.A. will render an opinion
with respect to the tax-free status of
the Merger. See, PROPOSAL II - THE
MERGER - FEDERAL INCOME TAX
CONSEQUENCES.
Conditions.......................... The Merger is conditioned upon the
consummation of the Reverse Stock Split.
In addition, the Merger Agreement
contains customary representations and
warranties of the parties, as well as
customary covenants regarding the
conduct of the respective businesses of
NuMed and Nutriceuticals prior to the
Effective Time. Each party's obligation
to consummate the Merger is subject to
the satisfaction of such customary
consents and conditions prior to the
Effective Time as set forth in the
Merger Agreement. See, PROPOSAL II- THE
MERGER - CONDITIONS PRECEDENT TO THE
MERGER.
Termination......................... The Merger Agreement may be terminated
before the consummation of the Merger by
either NuMed or Nutriceuticals under
various circumstances, including the
failure to consummate the Merger on or
before January 31, 1999. See, PROPOSAL
II- THE MERGER - MODIFICATION, WAIVER,
AND TERMINATION.
Accounting Treatment................ The Merger will be accounted for as a
"purchase," as such term is used under
generally accepted accounting
principles. See, PROPOSAL II- THE MERGER
- ACCOUNTING TREATMENT.
Recommendation of Board of
Directors.......................... The NuMed Board of Directors recommends
a vote FOR the adoption of the Merger
Agreement. See, Proposal II- The Merger
- Reasons for the Merger and
Recommendation of the NuMed Board.
7
<PAGE>
SUMMARY OF COMPARATIVE FINANCIAL DATA
NuMed was engaged in the health care industry from 1993 until the
fourth quarter of its fiscal 1997, in which it sold its major product line to a
competitor and thereafter liquidated the remaining portions of the business.
NuMed currently has no business operations, and no material assets or
liabilities.
Nutriceuticals is a development stage company which was organized in
September 1998, to engage in the Internet vitamin/nutriceuticals industry.
Nutriceuticals has not yet commenced operations.
A summary of comparative balance sheet data for NuMed and
Nutriceuticals is set forth below. The financial statements of NuMed and
Nutriceuticals, and a Pro Form Balance Sheet are attached as Appendix A hereto.
NUTRICEUTICALS.COM CORPORATION & NUMED SURGICAL, INC.
UNAUDITED PRO FORMA CONDENSED BALANCE SHEETS AS OF OCTOBER 31, 1998
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
NUTRICEUTICALS NUMED ADJUSTMENTS TOTAL
-------------- --------- ----------- ----------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash $ 116,000 $ 4,714 $ -- $ 120,714
Prepaid expenses 14,000 -- -- 14,000
--------- --------- --------- ---------
Total current assets $ 130,000 $ 4,714 $ -- $ 134,714
Organization costs 1,428 -- -- 1,428
--------- --------- --------- ---------
$ 131,428 $ 4,714 $ -- $ 136,142
========= ========= ========= =========
LIABILITIES
Current liabilities:
Accounts payable $ 1,428 $ 875 $ -- $ 2,303
Accrued expenses -- 16,437 -- 16,437
--------- --------- --------- ---------
Total current liabilities $ 1,428 $ 17,312 $ -- $ 18,740
========= ========= ========= =========
STOCKHOLDERS' EQUITY
Common stock 24,000 -- (21,424)(1) 2,576
Additional paid-in-capital 106,000 -- 21,424 (1) 127,424
Retained earnings(deficit) -- (12,598) -- (12,598)
--------- --------- --------- ---------
Total stockholders' equity 130,000 (12,598) -- 117,402
--------- --------- --------- ---------
Total liabilities and
stockholders equity $ 131,428 $ 4,714 $ -- $ 136,142
========= ========= ========= =========
<FN>
- ----------
(1) To give effect to the one-for-fifty Reverse Stock Split and the Merger of
Nutriceuticals with and into NuMed.
</FN>
</TABLE>
8
<PAGE>
NUTRICEUTICALS.COM CORPORATION & NUMED SURGICAL, INC.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF INCOME
FOR THE PERIOD ENDED OCTOBER 31, 1998
<TABLE>
<CAPTION>
NUTRICEUTICALS NUMED PRO FORMA
FOR THE PERIOD FOR THE SEVEN PRO FORMA FOR THE SEVEN
SEPTEMBER 8, 1998 MONTHS ENDED ADJUSTMENTS MONTHS ENDED
TO OCTOBER 31, 1998 OCTOBER 31, 1998 OCTOBER 31, 1998 OCTOBER 31, 1998
------------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Revenues $ -- $ -- $ -- $ --
Cost of Revenues -- -- -- --
---------- ---------- ---------- ----------
Gross Profit -- -- -- --
Selling, general and
administrative expenses -- (3,935) -- (3,935)
---------- ---------- ---------- ----------
Net income (loss) $ -- $ (3,935) $ -- $ (3,935)
========== ========== ========= ==========
</TABLE>
9
<PAGE>
THE SPECIAL MEETING OF THE SHAREHOLDERS OF NUMED
GENERAL INFORMATION
This Information Statement is first being furnished to the holders of
NuMed Common Stock on or about November ___ , 1998, and is accompanied by the
Notice of Special Meeting. The Special Meeting of Shareholders of NuMed is to be
held at the offices of Schifino & Fleischer, P.A., One Tampa City Center, 201
North Franklin Street, Suite 2700, Tampa, Florida 33602, on [Day], December ___
, 1998, at 9:30 a.m., local time, and at any adjournments or postponements
thereof. The purpose of the Special Meeting is to take action with respect to
the approval of (i) the Reverse Stock Split, and (ii) the Merger Agreement and
the transactions contemplated thereby.
RECORD DATE AND VOTING RIGHTS
The NuMed Board has fixed the close of business on November ___ , 1998,
as the record date (the "Record Date") for the determination of the Shareholders
of record entitled to receive notice of, and to vote at, the Special Meeting or
any adjournments or postponements thereof. At the close of business on the
Record Date, there were 8,775,685 issued and outstanding shares of NuMed Common
Stock (the only class of securities outstanding), held by approximately 540
holders of record or approximately [ # ] beneficial holders. Each share of NuMed
Common Stock is entitled to one (1) vote on all matters submitted to the
shareholders for approval.
Under Nevada law, the affirmative vote of a majority of the votes
entitled to be cast on the matter is required in order to approve a proposed
merger transaction, unless the articles of incorporation or the board of
directors require a greater number of votes. Neither the Articles of
Incorporation of NuMed nor its Board requires a greater number of votes. In
order to take action on the Reverse Stock Split and on any other matter
submitted to shareholders at a meeting where a quorum is present, the votes cast
in favor of the action must exceed the votes cast opposing the action, unless
the articles of incorporation or state law requires a greater number of votes.
The presence of a majority of the outstanding shares of NuMed Common Stock as of
the Record Date, in person or represented by proxy, will constitute a quorum at
the Special Meeting.
As of the Record Date, the directors and officers of NuMed and their
affiliates held an aggregate of 2,542,491 shares, or 28.97% of NuMed's
outstanding shares of Common Stock. The directors and officers of NuMed and
their affiliates have indicated that they intend to vote their shares of NuMed
Common Stock at the Special Meeting in favor of the Merger Agreement and the
Reverse Stock Split. The Board is not soliciting the proxies of the NuMed
Shareholders, however, Shareholders are invited to attend the Special Meeting
and can vote in person at that time.
NuMed Shareholders should note that Mr. Jugal K. Taneja is the Chairman
of the Board and Chief Executive Officer of both NuMed and Nutriceuticals, and
he and members of his family, collectively own or control approximately 27.6% of
the outstanding shares of NuMed Common Stock, and approximately 37.5% of the
outstanding shares of the common stock of Nutriceuticals. See, THE MERGER -
INTERESTS OF CERTAIN PERSONS IN THE MERGER.
WE ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
10
<PAGE>
PROPOSAL I
PROPOSAL TO EFFECT A ONE-FOR-FIFTY REVERSE SPLIT OF
THE OUTSTANDING SHARES OF NUMED COMMON STOCK
The NuMed Board of Directors has proposed a resolution that would
effect a reverse split of the outstanding shares of NuMed Common Stock on the
basis of one (1) new share of NuMed Common Stock for each fifty (50) shares of
outstanding NuMed Common Stock (the "Reverse Stock Split"). The Board's proposed
Reverse Stock Split would have the effect of reducing the number of outstanding
shares of NuMed Common Stock, but would not reduce the total number of
authorized shares of NuMed Common Stock from the existing 20,000,000 shares. As
of November ___ , 1998, 8,775,685 shares of NuMedCommon Stock were issued and
outstanding.
REASONS FOR THE PROPOSED REVERSE STOCK SPLIT
The principal purpose of the proposed Reverse Stock Split is to prevent
a significant increase in the number of outstanding shares of NuMed Common Stock
as a result of the Merger, by reducing the number of shares of NuMed Common
Stock presently outstanding from 8,775,685 shares to approximately 175,500
shares, and thereby reducing the number of shares of NuMed Common Stock subject
to issuance pursuant to the Merger Agreement from approximately 120,000,000
shares to 2,400,000 shares.
The Company's Articles of Incorporation authorize the issuance of
20,000,000 shares of NuMed Common Stock. The Board of Directors proposed the
Reverse Stock Split, rather than an increase in such number of authorized
shares, because it believes that a significant increase in the number of
outstanding shares as a result of the Merger (120,000,000 shares) would be
disproportionately large relative to the NuMed's present or future market
capitalization. Moreover, when such a large number of shares is outstanding, the
earnings per share of NuMed would only affected by a significant change in
NuMed's net earnings. If a smaller number of shares is outstanding after the
Merger (2,575,000 shares), NuMed's management would be more likely to see its
sales efforts and savings reflected in any future earnings per share of NuMed
Common Stock.
The ratio for combining the stock at one-for-fifty was arbitrarily
established to ensure the availability of a sufficient number of shares of NuMed
Common Stock to satisfy NuMed's obligation to issue stock pursuant to the Merger
Agreement, and retain enough authorized and unissued shares of NuMed Common
Stock for future stock issuances.
PRINCIPAL EFFECTS
If the Reverse Stock Split is approved, the total number of shares of
NuMed Common Stock subject to the Reverse Stock Split, 8,775,685, would be
converted automatically into an amount of whole shares equal to such number
divided by fifty. All fractional shares will be treated in the manner set forth
below. In addition, the aggregate number of authorized shares of NuMed Common
Stock and the par value of the NuMed Common Stock will not change under the
Board's proposed Reverse Stock Split.
Based upon 8,775,685 shares of NuMed Common Stock outstanding on
November ___ , 1998, the proposed one-for-fifty Reverse Stock Split would
decrease the outstanding shares of NuMed Common Stock to approximately 175,500
shares, which will be held by approximately 540 shareholders of record. The
proposed Reverse Stock Split would not directly affect the NuMed Shareholders'
proportionate equity interest in NuMed or the proportionate voting power of any
holder of NuMed Common Stock. However,
11
<PAGE>
consummation of the Reverse Stock Split is a condition of the Merger, and
accordingly, the approval of the Reverse Stock Split will INDIRECTLY change the
proportionate equity interests of NuMed's Shareholders. As a result of the
Merger, the percentage ownership of NuMed's public Shareholders will be reduced
from approximately 71.03% to 4.97%. Whereas NuMed has no operations or
significant assets, the Board believes that the Reverse Stock Split, the Merger
and resultant dilution of such shareholders' equity interest is necessary in
order to acquire a business opportunity and is therefore in the best interests
of the Shareholders of NuMed. The following table sets forth the capitalization
of NuMed after the Reverse Stock Split.
BEFORE REVERSE STOCK SPLIT AFTER REVERSE STOCK SPLIT
-------------------------- -------------------------
CLASS OF STOCK AUTHORIZED ISSUED AUTHORIZED ISSUED
-------------- ---------- ------ ---------- ------
Common Stock 20,000,000 8,775,685 20,000,000 2,575,514*
- ----------
* Includes 2,400,000 shares issuable to the shareholders of the
Nutriceuticals upon consummation of the Merger.
FRACTIONAL SHARES
No scrip or fractional share certificates for NuMed Common Stock will
be issued in connection with the proposed Reverse Stock Split, but in lieu
thereof, the NuMed Board of Directors has authorized NuMed's officers to round
up all fractional shares to the nearest whole share.
EXCHANGE OF STOCK CERTIFICATES
As soon as possible after the Effective Date, holders of NuMed Common
Stock will be notified and requested to surrender their present NuMed Common
Stock certificates for new certificates representing a number of whole shares of
NuMed Common Stock after the Reverse Stock Split. Until so surrendered, each
current certificate representing shares of NuMed Common Stock will be deemed for
all corporate purposes after the Effective Date to evidence ownership of NuMed
Common Stock in the appropriately reduced whole number of shares. An exchange
agent will be appointed (the "Exchange Agent"), to act for NuMed Shareholders in
effecting the exchange of their certificates. NuMed Shareholders should not
forward their stock certificates to the Exchange Agent until a letter of
instruction is received, and should surrender their certificates only WITH such
letter.
EFFECTIVE DATE
Upon approval of the proposed Reverse Stock Split by the NuMed
Shareholders at the Special Meeting and the filing of an amendment to NuMed's
Articles of Incorporation, the Reverse Stock Split will become effective as of
5:00 p.m., E.S.T. on the date of such approval and filing (the "Effective
Date"). Without any further action on the part of NuMed or the NuMed
Shareholders, the NuMed Common Stock held by NuMed Shareholders of record, will
be converted at 5:00 p.m., E.S.T. on the Effective Date into the right to
receive a new number of whole shares of NuMed Common Stock, as described above.
FEDERAL INCOME TAX CONSEQUENCES
THE FOLLOWING IS A GENERAL DISCUSSION OF THE MATERIAL ANTICIPATED
FEDERAL INCOME TAX CONSEQUENCES OF THE PROPOSED REVERSE STOCK SPLIT OF THE NUMED
COMMON STOCK. THIS DISCUSSION IS BASED ON THE FEDERAL INCOME TAX LAWS AS NOW IN
EFFECT AND AS CURRENTLY INTERPRETED; IT DOES NOT TAKE INTO ACCOUNT POSSIBLE
CHANGES
12
<PAGE>
IN SUCH TAX LAWS OR INTERPRETATIONS, INCLUDING AMENDMENTS TO APPLICABLE
STATUTES, REGULATIONS AND PROPOSED REGULATIONS OR CHANGES IN JUDICIAL OR
ADMINISTRATIVE RULINGS, SOME OF WHICH MAY HAVE RETROACTIVE EFFECT. THIS
DISCUSSION DOES NOT PURPORT TO ADDRESS ALL ASPECTS OF THE POSSIBLE FEDERAL
INCOME TAX CONSEQUENCES OF THE PROPOSED REVERSE STOCK SPLIT AND IS NOT INTENDED
AS TAX ADVICE TO ANY PERSON. IN PARTICULAR, AND WITHOUT LIMITING THE FOREGOING,
THIS DISCUSSION DOES NOT CONSIDER THE FEDERAL INCOME TAX CONSEQUENCES TO NUMED
SHAREHOLDERS IN LIGHT OF THEIR INDIVIDUAL INVESTMENT CIRCUMSTANCES OR TO TAX
LAWS (FOR EXAMPLE, LIFE INSURANCE COMPANIES, FINANCIAL INSTITUTIONS, TAX-EXEMPT
ORGANIZATIONS, REGULATED INVESTMENT COMPANIES AND FOREIGN TAXPAYERS). THIS
SUMMARY DOES NOT ADDRESS ANY CONSEQUENCE OF THE REVERSE STOCK SPLIT UNDER ANY
STATE, LOCAL OR FOREIGN TAX LAWS.
No ruling will be obtained from the Internal Revenue Service regarding
the Federal income tax consequences to the Shareholders of NuMed as a result of
the Reverse Stock Split. ACCORDINGLY, EACH NUMED SHAREHOLDER IS ENCOURAGED TO
CONSULT HIS OR HER TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES OF THE
PROPOSED TRANSACTION TO SUCH SHAREHOLDER, INCLUDING THE APPLICATION AND EFFECT
OF STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX LAWS.
Upon approval by the NuMed Shareholders, the proposed Reverse Stock
Split will qualify as a tax-free recapitalization for NuMed and the NuMed
Shareholders. Shares of NuMed Common Stock in the hands of a Shareholder after
the Reverse Stock Split will have an aggregate basis for computing gain or loss
equal to the aggregate basis of the shares of NuMed Common Stock held by such
shareholder immediately prior to the proposed Reverse Stock Split, increased by
any gain recognized from the rounding of fractional shares to the nearest next
whole share. A NuMed Shareholder's holding period for NuMed Common Stock after
the Reverse Stock Split will not change.
DISSENTERS' RIGHTS
Dissenting NuMed Shareholders have no appraisal rights under Nevada
law, NuMed's Articles or NuMed's By-laws in connection with the proposed Reverse
Stock Split.
VOTE REQUIRED
The Board of Directors believes that the Reverse Stock Split are in the
best interests of NuMed and its shareholders. In order to approve and adopt this
proposal at the Special Meeting, the votes cast in favor of the proposal must
exceed the votes cast opposing this proposal, provided a quorum is present.
THE NUMED BOARD RECOMMENDS A VOTE "FOR" THE
PROPOSAL TO EFFECT A ONE-FOR-FIFTY REVERSE SPLIT OF NUMED COMMON STOCK.
13
<PAGE>
PROPOSAL II
THE MERGER
THE FOLLOWING SUMMARY OF CERTAIN TERMS AND PROVISIONS OF THE MERGER
AGREEMENT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MERGER AGREEMENT, A
COPY OF WHICH IS ATTACHED HERETO AS APPENDIX B AND IS INCORPORATED HEREIN BY
REFERENCE. ALL SHAREHOLDERS ARE URGED TO READ THE MERGER AGREEMENT, AND THE
OTHER APPENDICES HERETO, IN THEIR ENTIRETY.
DESCRIPTION OF THE MERGER
In accordance with the provisions of the Merger Agreement, at the
Effective Time, Nutriceuticals will be merged with and into NuMed, which will be
the surviving corporation. The NuMed Articles of Incorporation and the NuMed
Bylaws in effect at the Effective Time will continue to govern NuMed, until
amended or repealed in accordance with applicable law. The Merger has been
approved by the shareholders of Nutriceuticals. See, "The Merger - Conditions to
the Merger."
At the Effective Time, each share of Nutriceuticals Common Stock
outstanding immediately prior to the Effective Time will be converted
automatically into the right to receive one (1) share of NuMed Common Stock.
Nutriceuticals has represented that, as of the Effective Time, there will be no
more than 2,400,000 shares of Nutriceuticals Common Stock issued and
outstanding. Following the Effective Time and assuming that 2,400,000 shares of
Nutriceuticals Common Stock are outstanding at the Effective Time, the former
shareholders of Nutriceuticals would own 2,400,000 shares or approximately 93%
of the then outstanding NuMed Common Stock, on a post-Reverse Stock Split basis.
The shares of NuMed Common Stock outstanding immediately prior to the
Merger will continue to be outstanding after the Effective Time. As of the
Record Date, there were 8,775,685 shares of NuMed Common Stock outstanding, or
approximately 175,500 shares on a post-Reverse Stock Split basis, assuming no
exercise of dissenters' rights by shareholders of NuMed, as explained below.
The Merger Agreement contemplates the following additional transactions
in connection with the Merger: (a) an amendment to NuMed's Articles of
Incorporation to change NuMed's corporate name to "Nutriceuticals.com
Corporation"; and (b) the election of four (4) directors to serve as the
directors of NuMed after the Merger, until the next annual meeting and until
their successors are elected and qualified. The four (4) persons who will become
directors of NuMed at the Effective Time are Jugal K. Taneja, Stephen M.
Watters, William L. LaGamba, and Mandeep K. Taneja. The approval of the Merger
Agreement constitutes approval of the above related transactions.
EFFECTIVE TIME OF THE MERGER
The Effective Time will occur on the date and at the time the Articles
of Merger shall have been accepted for filing by the Nevada Department of State
and the Florida Department of State, or such other time as is agreed to by the
parties as specified in the Articles of Merger. Unless otherwise agreed by NuMed
and Nutriceuticals, the parties have agreed to use their reasonable efforts to
cause the Effective Time to occur as soon as possible following the last to
occur of (i) the effective date of the Reverse Stock Split or (ii) the date on
which the Merger Agreement has been approved and adopted by the requisite vote
of the holders of NuMed Common Stock and all other conditions to the Merger have
been met or waived. See "The Merger--Conditions
14
<PAGE>
to the Merger and Termination." If approved by the NuMed Shareholders, the
parties expect that the Effective Time will occur on or before December ___ ,
1998.
BACKGROUND OF THE MERGER
NuMed was incorporated in October 1993, and it was actively engaged in
the research, development and distribution of medical instruments and surgical
supplies. NuMed was also actively engaged in the manufacturing and distribution
of products for assistive living, self-care and homecare. During fiscal 1997,
the NuMed Board concluded that, due to the existence of competitors with greater
resources than NuMed's, the value of NuMed's business would deteriorate over
time and that it was the best time to sell its principal product line. The
product line was sold to a competitor in March 1998, and the remaining portions
of NuMed's business were thereafter liquidated. NuMed currently has no material
assets or liabilities.
Nutriceuticals is a newly formed, development stage corporation, which
was organized in September 1998 to engage in the Internet vitamin/nutriceuticals
industry. Mr. Jugal K. Taneja is the Chairman of the Board and Chief Executive
Officer ("CEO") of both NuMed and Nutriceuticals, and he is also a principal
shareholder of both of the companies. SEE, "THE MERGER - INTERESTS OF CERTAIN
PERSONS IN THE MERGER." Due to the relationship of the management and ownership
of NuMed and Nutriceuticals, consideration was given, in October, 1998, as to
combining the two companies through a merger, because NuMed is a publicly
reporting corporation, and Nutriceuticals has a business plan and is capitalized
with $130,000.
In the Merger, each issued and outstanding share of common stock, no
par value per share, of Nutriceuticals ("Nutriceuticals Common Stock") will be
converted into the right to receive one (1) share of NuMed Common Stock, on a
post-Reverse Stock Split basis. The shares of NuMed Common Stock to be received
by Nutriceuticals shareholders pursuant to the Merger Agreement are referred to
herein as the "Merger Consideration." As a result of the overlapping management
and ownership of NuMed and Nutriceuticals, the exchange ratio for the Merger
Consideration was not obtained in an arm's length negotiation.
Although NuMed's shares of Common Stock are traded in the
over-the-counter market on the bulletin board, there has been no active trading
market for NuMed's shares. Therefore, the NuMed Board was not able to ascertain
an aggregate fair market valuation for the Merger Consideration, based on recent
trading value of the NuMed Common Stock. The NuMed Board did not obtain an
outside financial advisor to ascertain the value of the parties, or the value or
fairness of the Merger Consideration, believing that the cost thereof was not
warranted.
REASONS FOR THE MERGER AND RECOMMENDATION OF THE NUMED BOARD
The NuMed Board has unanimously approved the Merger Agreement and the
transactions contemplated thereby, believe that the Merger is in the best
interests of NuMed and its Shareholders, and recommends that the Shareholders of
NuMed vote "FOR" approval of the Merger Agreement.
In evaluating and determining to approve the Merger Agreement, the
NuMed Board, without the assistance of a financial advisor or outside legal
counsel, considered a variety of factors and based its opinion as to the
fairness of the transactions contemplated by the Merger Agreement primarily on
the following factors:
(i) The financial terms of the Merger. Although the aggregate
market value of the Merger Consideration is not readily ascertainable,
given the fact that the shares of Common Stock of NuMed are not
actively traded, an outside valuation of NuMed, Nutriceuticals, or the
Merger
15
<PAGE>
Consideration was not obtained, as it was believed that the cost of
such valuations was not warranted. The NuMed Board believes, however,
that the substantial dilutive effect of the issuance of the Merger
Consideration, on the NuMed Shareholders is warranted, because NuMed
has no assets or continuing operations and Nutriceuticals is
capitalized with $130,000 and has a developing business.
(ii) The future earning prospects of Nutriceuticals and the
vitamin/nutriceuticals industry. Vitamin/nutriceutical sales were
estimated to have been approximately $21 billion in 1997, and are
expected to grow to approximately $30 billion by the year 2000.
Nutriceuticals, a development stage company, newly organized to engage
in the Internet vitamin industry, is presently developing, internally,
for its Website, a transaction processing system to manage inventory
orders and shipping, and to process cash and credit card purchases.
Nutriceuticals estimates that such system will take approximately sixty
(60) days to complete, at a cost of $ _____.
(iii) Management believes that there are perceived advantages
of an online vs. physical store. An online store has the potential to
eliminate, or mitigate, critical inefficiencies and problems associated
with physical vitamin/nutriceuticals stores. An online
vitamin/nutriceuticals store can provide customers with a greater
selection of products, because it isn't faced with shelf-space
limitations, and at the same time afford customers an opportunity to
search through a vast line of available products in a more efficient
manner. In addition, capital and real estate costs are less intensive
for an online store as opposed to a physical store.
(iv) The advantages and risks of the Merger. The NuMed Board
identified the following risks in connection with the Merger: (a)
Nutriceuticals is a development stage company and as such its
operations are subject to numerous risks associated with establishing a
new business with new technology, including a competitive environment
in an industry characterized by numerous well-established and
well-capitalized companies; (b) the newness of the online commerce
market, particularly over the Internet; (c) the rapidly evolving and
increasingly intense competition of the online market; (d) the minimal
barriers to entry into the online market allowing current and future
competitors to launch new websites at a relatively low cost; (e)
uncertainty of the commercial acceptability of the online retail
industry by vitamin/nutriceutical customers; (f) the cost of developing
Nutriceuticals' search engine and processing system for its website;
and (g) the uncertainty as to the future regulation of the Internet and
the potential adverse impact of any such regulation. The NuMed Board
believes, however, that these risks are outweighed by the potential
benefits to be realized from the Merger, because the Merger provides
NuMed with cash and a business plan. However, there is no assurance
that the cash will be sufficient to carry out the business plan and the
surviving corporation may need additional capital.
Each of the above factors supports, directly or indirectly the
determination of the NuMed Board as to the fairness, from a financial point of
view, of the Exchange Ratio to the holders of NuMed Common Stock. The NuMed
Board did not quantify or attempt to assign relative weights to the specific
factors considered in reaching its determination.
NuMed Shareholders should note that certain members of management and
directors of NuMed and Nutriceuticals have certain interests in and may derive
certain benefits as a result of the Merger. However, despite the existence of
such conflicts of interest, NuMed did not appoint a special committee of
independent directors to review and considered the terms and conditions of the
Merger, nor did the NuMed Board obtain a fairness opinion from and independent
financial advisor. See, "The Merger - Interests of Certain Persons in the
Merger."
16
<PAGE>
CONDITIONS PRECEDENT TO THE MERGER
The Merger will occur only if the Merger Agreement is approved by the
requisite vote of the shareholders of NuMed and Nutriceuticals. The shareholders
of Nutriceuticals have already given their approval of the Merger Agreement.
Consummation of the Merger is subject to the satisfaction of certain other
conditions, unless waived, to the extent legally permissible. Such conditions
include (i) that the Reverse Stock Split is approved by the requisite vote of
the shareholders of NuMed, (ii) the absence of any statute, rule, regulation,
executive order, decree, or injunction has been enacted, entered, promulgated or
enforced by any court or governmental authority which prohibits the consummation
of the Merger, and (iii) the aggregate number of shares of NuMed Common Stock
and Nutriceuticals Common Stock, with respect to which objections to the Merger
and demands for payment of the fair value thereof shall have been made, shall
not exceed five percent (5%) of the aggregate number of shares of stock entitled
to object and make such demand.
There are no federal or state regulatory requirements which must be
satisfied or approvals which must be obtained in connection with the Merger
Agreement, other than approval of shareholders and the filing the appropriate
Merger documents with the States of Nevada and Florida.
MODIFICATION, WAIVER AND TERMINATION
The Merger Agreement provides that it may be amended by a subsequent
writing signed by each party upon the approval of their respective Boards of
Directors. However, the provision relating to the consideration to be received
by the shareholders of Nutriceuticals may not be amended after the Special
Meeting in a manner to increase, reduce or otherwise modify in any material
respect the consideration to be provided to the holders of Nutriceuticals Common
Stock without the further approval of the holders of the issued and outstanding
shares of NuMed Common Stock entitled to vote thereon.
The Merger Agreement provides that each party may (i) waive any default
in the performance of any term of the Merger Agreement by the other party, (ii)
waive or extend the time for compliance of the conditions precedent to its
obligations under the Merger Agreement (iii) waive any of the conditions
precedent to consummate the Merger, to the extent legally permitted. Neither
party intends, however, to waive any conditions of the Merger if such waiver
would, in the judgment of the waiving party, have a material adverse effect on
its shareholders.
The Merger Agreement may be terminated by mutual agreement of the
Nutriceuticals Board and the NuMed Board. The Merger Agreement may also be
terminated by either the Nutriceuticals Board or the NuMed Board (i) if the
approvals of the Merger Agreement by the NuMed or the Nutriceuticals
shareholders are not obtained; (ii) if the required approval of the Reverse
Stock Split by the NuMed Shareholders is not obtained; (iii) if the Merger is
not consummated by January 31, 1999; provided that the failure to consummate the
Merger by such date is not caused by the breach of the Merger Agreement by the
terminating party.
FEDERAL TAX CONSEQUENCES
Neither NuMed nor Nutriceuticals intend to seek a ruling form the
Internal Revenue Service with respect to the tax consequences of the Merger.
Schifino & Fleischer, P.A. has delivered to NuMed its opinion that, under
federal law as currently in effect, (a) the proposed Merger will constitute a
reorganization within the meaning of Section 368(a) of the Code; (b) no gain or
loss will be recognized by the shareholders of NuMed as a result of the
transactions contemplated by the Merger Agreement, except with respect to any
NuMed shareholder who receives payment in cash as a result of the exercise of
rights as a dissenting shareholder; and
17
<PAGE>
(c) in the event of the receipt of cash by any NuMed Shareholder who elects to
exercise his or her rights as a dissenting shareholder, gain or loss will be
recognized in an amount equal to the difference between the cash received and
the basis of the stock surrendered, which gain or loss will be capital gain or
loss if the stock was a capital asset in the hands of the shareholder.
THE FOREGOING IS A SUMMARY OF THE ANTICIPATED FEDERAL INCOME TAX
CONSEQUENCES OF THE PROPOSED MERGER UNDER THE CODE, AND IS INCLUDED IN THIS
INFORMATION STATEMENT FOR GENERAL INFORMATION ONLY. IT DOES NOT INCLUDE
CONSEQUENCES OF STATE, LOCAL, OR OTHER TAX LAWS OR SPECIAL CONSEQUENCES TO
PARTICULAR SHAREHOLDERS HAVING SPECIAL SITUATIONS. SHAREHOLDERS OF NUMED ARE
URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING SPECIFIC TAX CONSEQUENCES OF
THE MERGER TO THEM INCLUDING THE APPLICATION AND EFFECT OF THE CONSTRUCTIVE
OWNERSHIP RULES, FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF SUBSEQUENT SALES
OF NUMED COMMON STOCK AFTER THE MERGER.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
GENERAL. Certain members of NuMed's and Nutriceuticals' management and
Boards have interests in the Merger that are in addition to any interests they
may have as shareholders of NuMed and/or Nutriceuticals, generally. These
interests include, among others, provisions in the Merger Agreement relating to
the management of NuMed after the Effective Time, election or appointment of all
members of the Nutriceuticals Board to the NuMed Board after the Effective Time,
and indemnification, all as herein after described.
MANAGEMENT POST-MERGER. NuMed has agreed to cause all of the
Nutriceuticals' directors to be elected to the Board of Directors of NuMed, for
a one-year term following consummation of the Merger, and that they shall be
appointed to their same management positions as executive officers of NuMed. As
of the Effective Time, Jugal K. Taneja, the current Chairman of the Boards of
NuMed and Nutriceuticals, will be remain the Chairman of the Board of NuMed
after the Merger. In addition, Mr. Taneja shall retain his position as Chief
Executive Officer of NuMed. Stephen M. Watters, who is the President and a
Director of Nutriceuticals will be appointed to the same positions with NuMed,
as will William L. LaGamba, the current Secretary and a Director of
Nutriceuticals. In addition, the Merger Agreement provides that Mandeep K.
Taneja shall be appointed as a Director of NuMed as of the Effective Time.
Mandeep K. Taneja is the son of Jugal K. Taneja.
INDEMNIFICATION. NuMed has agreed that it will, following the Effective
Time, indemnify, defend and hold harmless the current and former directors and
officers of NuMed and Nutriceuticals against all losses, expenses, claims,
damages, or liabilities arising out of actions or omissions occurring at or
prior to the Effective Time to the fullest extent permitted under Nevada law and
by the NuMed Articles of Incorporation and the NuMed Bylaws as in effect on the
date of the Merger Agreement, including provisions relating to advances of
expenses incurred in defense of any litigation.
OWNERSHIP OF NUTRICEUTICALS COMMON STOCK BY THE CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER OF NUMED. As of November __ , 1998, Mr Jugal K.
Taneja, and members of his family, owned in the aggregate 2,418,866 shares of
NuMed Common Stock, representing approximately 27.56% of the outstanding shares
of NuMed Common Stock, before the Merger. Similarly, Mr. Taneja and his family
own in the aggregate 900,000 shares of Nutriceuticals Common Stock, representing
approximately 37.5% of the outstanding shares of Nutriceuticals Common Stock,
before the Merger. Giving effect to the Merger and the Reverse Stock Split, Mr.
Taneja and his family will control in the aggregate 948,368 shares of NuMed
Common Stock, representing in an approximate 33.0% of the outstanding shares of
NuMed Common Stock after the Merger.
18
<PAGE>
No other officer or director of NuMed has beneficial ownership of any
Nutriceuticals Common Stock. Similarly, no other officer or director of
Nutriceuticals has beneficial ownership of any NuMed Common Stock.
CERTAIN EFFECTS OF THE MERGER ON THE RIGHTS OF NUMED AND NUTRICEUTICALS
SHAREHOLDERS
The rights of shareholders of NuMed are presently governed by Nevada
law, and the rights of shareholders of Nutriceuticals are presently governed by
Florida law. At the Effective Time, the rights of the shareholders of NuMed will
continue to be governed by Nevada law. The Articles of Incorporation and ByLaws
of NuMed will be the Articles of Incorporation and By-Laws of the surviving
corporation.
ACCOUNTING TREATMENT
The Merger will be accounted for as a "purchase," as such term is used
under generally accepted accounting principles.
RESTRICTIONS ON RESALES OF NUMED COMMON STOCK ISSUED IN THE MERGER
All shares of NuMed Common Stock received by Nutriceuticals
shareholders in the Merger are being acquired for investment purposes only by
the shareholders of Nutriceuticals. Such shares have not been registered under
the Securities Act of 1933, as amended (the "Securities Act") and may not be
freely traded until registered or sold pursuant to an exemption from
registration. Stop transfer instructions will be given NuMed to the transfer
agent with respect to such securities, and certificates shall bear an
appropriate legend relating to transfer restrictions.
EXPENSES
The Merger Agreement provides that, whether or not the Merger is
consummated, all expenses incurred in connection with the Merger Agreement will
be paid by the party incurring such expenses, except that expenses incurred in
printing this Information Statement and relating to the issuance of NuMed Common
Stock will be paid by NuMed. It is estimated that these expenses will
approximate [ $ ].
RIGHTS OF DISSENTING SHAREHOLDERS
HOLDERS OF SHARES OF NUMED COMMON STOCK MAY BE ENTITLED TO ASSERT
DISSENTERS' RIGHTS UNDER THE NEVADA REVISED STATUTES ("NRS"). THE FOLLOWING IS A
SUMMARY OF THE PROVISIONS OF THE NEVADA GCL RELATING TO DISSENTERS' RIGHTS.
NuMed Shareholders who wishes to dissent from the proposed Merger and
obtain payment of the fair value of their shares of NuMed Common Stock: (i) must
deliver to NuMed, before the vote is taken, written notice of his or her intent
to demand payment for his or her NuMed Common Stock if the proposed action is
effectuated (the "Shareholder's Notice"); and (ii) must NOT vote his shares in
favor of the proposed action. A NUMED SHAREHOLDER WHO DOES NOT SATISFY THE
REQUIREMENTS OF SUBSECTIONS (I) AND (II) WILL NOT BE ENTITLED TO PAYMENT FOR HIS
OR HER SHARES.
If the proposed Merger is thereafter approved by the required vote at
the NuMed Special Meeting, NuMed shall, within ten (10) days after effectuation
of the action, mail a notice (the "Company Notice") to all NuMed Shareholders
who prior to the meeting delivered a Shareholder Notice which satisfies the
above requirements. The Company Notice shall:
19
<PAGE>
(i) state where a demand for payment must be sent, and where and when
certificates for certificated shares must be deposited, in order to obtain
payment;
(ii) inform holders of uncertificated shares as to what extent
transfer of shares will be restricted from the time that demand for payment is
received;
(iii) supply a form for demanding payment, which form includes a
request for certification of the date on which the shareholders acquired
beneficial ownership of the shares;
(iv) set a date by which NuMed must receive the demand for payment,
which date may not be less than thirty (30) nor more than sixty (60) days after
the date the Notice is delivered; and
(v) be accompanied by a copy of the Nevada GCL Sections 92A.300 to
92A.500, inclusive, which set forth the rights of dissenters.
NUMED SHAREHOLDERS WHO FAIL TO DEMAND PAYMENT, OR FAIL TO DEPOSIT CERTIFICATES,
IN THE MANNER REQUIRED BY THE COMPANY NOTICE PURSUANT TO THE NRS, WILL HAVE NO
RIGHT TO RECEIVE PAYMENT FOR THEIR SHARES OF NUMED COMMON STOCK. A dissenter
shall retain all other rights of a NuMed Shareholder until these rights are
modified by effectuation of the proposed corporate action.
Within thirty (30) days after receipt of demand for payment, NuMed
shall remit to dissenters who have made demand and have deposited their
certificates, the amount which NuMed estimates to be the fair value of the
shares, with interest if any has accrued. If NuMed fails to remit, or if the
dissenter believes that the amount remitted is less than the fair value of the
shares of NuMed Common Stock, a dissenter may send NuMed their own estimate of
the value of the NuMed Common Stock and demand payment for the deficiency. IF A
DISSENTER DOES NOT FILE SUCH ESTIMATE WITHIN THIRTY (30) DAYS AFTER NUMED'S
MAILING OF ITS REMITTANCE, SUCH DISSENTER SHALL BE ENTITLED TO NO MORE THAN THE
AMOUNT REMITTED.
20
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
beneficial ownership of NuMed Common Stock as of November ___ , 1998, by (i)
each person known to NuMed to own beneficially more than 5% of NuMed Common
Shares, and (ii) all Directors and Officers as a group. As of November ___ ,
1998, there were approximately 8,775,685 NuMed Common Shares issued and
outstanding.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
NAME AND ADDRESS AMOUNT AND NATURE PERCENTAGE
OF BENEFICIAL OWNER OF BENEFICIAL OWNER (1)(2) OF CLASS (3)
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Jugal K. Taneja (4)..................................... 2,418,866 27.56%
6505 Rockside Road, Suite 400
Independence, Ohio 44131
The First Delhi Trust (5)............................... 449,700 5.12%
7270 Sawgrass Point Drive
Pinellas Park, Florida, 33782
Westminster Trust Company (6)........................... 900,000 10.26%
7270 Sawgrass Point Drive
Pinellas Park, Florida, 33782
Manju Taneja (7)........................................ 1,069,116 12.18%
6505 Rockside Road, Suite 400
Independence, Ohio 44131
Michael J. Diroff....................................... 487,000 5.54%
6505 Rockside Road, Suite 400
Independence, Ohio 44131
All Directors and Officers as a group (2 persons)....... 2,542,491 28.97%
<FN>
- -------------------
(1) In accordance with Rule 13d-3 promulgated pursuant to the Exchange Act, a
person is deemed to be the beneficial owner of the security for purposes
of the rule if he or she has or shares voting power or dispositive power
with respect to such security or has the right to acquire such ownership
within sixty (60) days. As used herein, "voting power" is the power to
vote or direct the voting of shares, and "dispositive power" is the power
to dispose or direct the disposition of shares, irrespective of any
economic interest therein.
(2) Except as otherwise indicated by footnote, the persons named in the table
have sole voting and investment power with respect to all of the NuMed
Common Shares beneficially owned by them.
(3) In calculating the percentage ownership for a given individual or group,
the number of NuMed Common Shares outstanding includes unissued shares
subject to options, warrants, rights or conversion privileges exercisable
within sixty days (60) held by such individual or group.
(4) Includes 449,700 shares held of record by The First Delhi Trust; 900,000
shares held of record by Westminster Trust Company; and 524,550 shares
held of record by Manju Taneja. Mr. Taneja disclaims voting power with
respect to the shares held of record by Manju Taneja, his spouse.
(5) A trust established for the benefit of the children of Jugal K. Taneja.
21
<PAGE>
(6) A partnership in which Jugal K. Taneja is the general partner.
(7) Includes 544,616 shares held of record by Jugal K. Taneja. Ms. Taneja
disclaims voting power with respect to the shares held of record by Jugal
K. Taneja, her spouse.
</FN>
</TABLE>
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS OF NUMED
The following table sets forth for each director and executive officer
of NuMed information regarding his age, position(s)s with NuMed, and the amount
of NuMed Common Stock which he beneficially owns.
<TABLE>
<CAPTION>
AMOUNT OF NUMED PERCENTAGE OF CLASS OF
NAME AGE POSITION COMMON STOCK OWNED NUMED COMMON STOCK
- ---- --- -------- ------------------ ----------------------
<S> <C> <C> <C> <C>
Jugal K. Taneja 55 Chairman of the Board, 2,418,866 27.6%
Chief Executive Officer,
President, and Secretary
Robert P. Ottman 56 Director 123,625 1.1%
</TABLE>
Pursuant to the NuMed Bylaws, each director of the company serves as a
director for a term of one (1) year and until his successor is duly qualified.
Officers shall be appointed annually by the board of directors, at its annual
meeting, to hold such office until an Officer's successor shall have been duly
appointed and qualified, unless an Officer sooner dies, resigns or is removed by
the Board.
DIRECTORS AND OFFICERS OF NUTRICEUTICALS
The following table sets forth for each director and executive officer
of Nutriceuticals information regarding his age, position(s)s with
Nutriceuticals, and the amount of Nutriceuticals Common Stock which he
beneficially owns.
<TABLE>
<CAPTION>
AMOUNT OF PERCENTAGE OF CLASS
NAME AGE POSITION NUTRICEUTICALS OF NUTRICEUTICALS
- ---- --- -------- COMMON STOCK OWNED COMMON STOCK
------------------ ------------------
<S> <C> <C> <C> <C>
Jugal K. Taneja(1) 55 Chairman of the Board, 500,000 20.7%
Chief Executive Officer
Stephen M. Watters 31 President and Director 1,000,000 41.6%
William L. LaGamba 40 Secretary and Director 100,000 4.2%
Mandeep K. Taneja 24 Director 200,000 8.4%
</TABLE>
(1) Does not include 200,000 shares owned by Mandeep K. Taneja or 200,000
shares owned by Mihir K. Taneja, Jugal K. Taneja's adult children.
22
<PAGE>
PROPOSED OFFICERS AND DIRECTORS OF SURVIVING CORPORATION
Pursuant to the terms of the Merger Areement, the persons listed in
the table below shall serve as the Directors and Officers of Numed as of the
Effective Time of the Merger. The following table set forth information
regarding each such person's age, position(s)s with the surviving corporation,
and the amount of common stock which he will beneficially own in the surviving
corporation after the Merger
<TABLE>
<CAPTION>
PERCENTAGE OF CLASS
AMOUNT OF SURVIVING OF SURVIVING
NAME AGE POSITION CORPORATION'S STOCK CORPORATION'S STOCK
- ---- --- -------- ------------------- -------------------
<S> <C> <C> <C> <C>
Jugal K. Taneja 55 Chairman of the Board, 548,368 17.4%
Chief Executive Officer
Stephen M. Watters 31 President and Director 1,000,000 38.8%
William L. LaGamba 40 Secretary and Director 100,000 3.9%
Mandeep K. Taneja 24 Director 200,000 7.8%
</TABLE>
Set forth below is the business experience and other biographical
information regarding the persons who will be Directors and Officers of Numed
after the Effective Time of Merger.
JUGAL K. TANEJA has been Chairman of the Board and a Director of
Nutriceuticals.com Corporation since the inception in September 1998. He also
serves as, chief Executive Officer, President, Secretary and a Director of Numed
Surgical, Inc. Mr. Taneja also serves as Chairman of the Board, Chief Executive
Officer and Director of Numed Home Health Care, Inc. Mr. Taneja also serves as
Chairman of Dynamic Health Products, Inc. The parent company of Innovative
Health Products, Inc., Becan, Incredible Products and NuWave Health Products,
Inc. Prior to his association with the company, Mr. Taneja served as Senior Vice
President of Union Commerce Bank and Huntington National Bank from 1979 to 1983.
STEPHEN M. WATTERS has been President and a Director of
Nutriceutical.com Corporation since the inception in September 1998. Mr. Watters
is also Vice President of Finance of Dynamic Health Products, a manufacturer and
distributor of nutritional and health products. Prior to his association with
the Company, Mr. Watters was in the investment banking and brokerage business
from 1991 To 1998. He received his Executive Masters of Business Administration
Degree from Case Western Reserve University.
WILLIAM K. LAGAMBA Has been Secretary and a Director of Nutriceuticals.com
Corporation since the inception in September 1998. Mr. Lagamba serves as Chief
Executive Officer and Director of Dynamic Health Products. Mr. Lagamba has been
involved in the distribution, sales, marketing of pharmaceuticals, health and
beauty products and over-the-counter products for the past 15 years. Prior to
his association with the company, Mr. Lagamba was Vice President of Retail Sales
for Mckesson Drug Company, a Fortune 100 Company.
MANDEEP K. TANEJA Has served as Director of Nutriceuticals.com Corporation since
its inception in September 1998. Mr. Taneja has actively invested in various
venture capital activities and is in his final year as a law student at the
University of Miami. Mr. Taneja has undergraduate Business Management Degree
from the University of Rochester. Mandeep Taneja is the son of Jugal Taneja.
23
<PAGE>
DIRECTOR MEETINGS AND COMMITTEES
During the fiscal year ended March 30, 1998, the Board of Directors of
Numed held a total of 3 telephonic meetings. Each of the Directors attended more
than 75% of the total number of meetings of the Board of Directors. Numed does
not have standing audit, nominating or compensation committees, or committees
performing similar functions.
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following summary compensation table sets forth the cash and
non-cash compensation paid to or accrued for the past three (3) fiscal years for
Numed's Chief Executive Officers.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
NAME AND PRINCIPAL POSITION (1) FISCAL YEAR SALARY ($) BONUS ($) ALL OTHER COMPENSATION ($)
------------------------------- ----------- ---------- --------- --------------------------
<S> <C> <C> <C> <C>
Jugal K. Taneja 1998 0 0 0
Chief Executive Officer 1997 0 0 0
Nayan S. Shah, 1996 79,200 0 0
Chief Executive Officer
<FN>
- ----------
(1) Mr. Shah served as NuMed's Chief Executive Officer in Fiscal 1996. Jugal
K. Taneja became NuMed's Chief Executive Officer in Fiscal 1997. Mr.
Taneja received no compensation in 1997 or 1998. There are no other
Officers of NuMed or individuals whose compensation from NuMed exceeded
$100,000 in any of the past three (3) fiscal years.
</FN>
</TABLE>
OTHER MATTERS
At the time of the preparation of this Information Statement, the NuMed
Board had not been informed of any matters which would be presented for action
at the Special Meeting, other than the proposals specifically set forth in the
Notice of Special Meeting of Shareholders and referred to herein.
NUMED SURGICAL, INC.
----------------------------------------
Date: November ___ , 1998 Jugal K. Taneja, Chief Executive Officer
24
<PAGE>
APPENDIX A
NUMED SURGICAL, INC.
FINANCIAL STATEMENTS
MARCH 31, 1998 AND 1997
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
NuMed Surgical, Inc.
Clearwater, Florida
We have audited the statements of net deficiency in liquidation of
NuMed Surgical, Inc. (a Nevada corporation) as of March 31, 1998, and the
related statements of changes in net deficiency in liquidation for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit. The financial statements of NuMed Surgical, Inc.
as of March 31, 1997 were audited by Ernst & Young, LLP, whose report dated June
4, 1997 expressed an unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
As discussed in Note A to the financial statements, effective March 31,
1997 the Company sold the majority of its operating assets and effectively
ceased operations. The Company is presently in the process of liquidation, and
management's plans in regard to this matter are further discussed in the notes
to the financial statements. Therefore, at March 31, 1997 the Company has
changed its basis of accounting from the going-concern basis to a liquidation
basis.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets in liquidation of NuMed
Surgical, Inc. as of March 31, 1998, and the changes in net assets in
liquidation for the year then ended, in conformity with generally accepted
accounting principles.
Kirkland, Russ, Murphy & Tapp
Clearwater, Florida
May 29, 1998
F-2
<PAGE>
NUMED SURGICAL, INC.
STATEMENTS OF NET DEFICIENCY IN LIQUIDATION
YEARS ENDED MARCH 31, 1998 AND 1997
1998 1997
-------- --------
ASSETS
Current assets:
Cash $ 8,274 35,341
Accounts receivable 13,270 63,322
Allowable for bad debts (13,270) (16,370)
Inventories -- 8,272
Prepaid expenses and other assets -- 300
-------- --------
Total assets $ 8,274 90,865
======== ========
LIABILITIES AND NET DEFICIENCY
Current liabilities:
Accounts payable $ 500 32,708
Accrued expenses 16,437 14,760
Due to AMATECH -- 47,695
-------- --------
Total current liabilities 16,937 95,163
Net deficiency in liquidation, attribute to
8,775,685 shares $ (8,663) (4,298)
======== ========
See notes to financial statements and auditors' report.
F-3
<PAGE>
NUMED SURGICAL, INC.
STATEMENT OF CHANGES IN NET DEFICIENCY IN LIQUIDATION
YEAR ENDED MARCH 31, 1998
Increase in net assets (liabilities) in liquidation:
Sales $ 3,918
Bad debt recovery 3,101
-----------
Decreases in net assets (liabilities) in liquidation:
Cost of goods sold (16,760)
Professional fees (13,012)
Occupancy (6,432)
Office expense (1,283)
Other (6,112)
-----------
Decrease in net assets (liabilities) in
liquidation before adjustments (36,580)
Adjustments of estimated values 32,215
Decrease in net assets (liabilities) in
liquidation (4,365)
Beginning net assets in liquidation (4,298)
Ending net assets (liabilities) in liquidation $ (8,663)
===========
Loss per share:
Loss attributable to common stockholders $ (4,365)
Net loss per common share (basic and diluted) --
===========
Weighted average common stock outstanding (basic and diluted) 8,775,685
===========
See notes to financial statements and auditors' report.
F-4
<PAGE>
NUMED SURGICAL, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1997
Net sales $ 488,340
Cost of goods sold 304,199
-----------
Gross profit (loss) 184,141
Selling, general and administrative expenses:
Salary and benefits 98,890
Professional fees 30,544
Travel and entertainment 8,397
Occupancy 15,008
Advertising and marketing 23,687
Insurance 17,050
Research and development expense 242
Office expense 7,132
Depreciation, amortization and write off of long lived assets 68,605
Bad debt 9,492
Other 11,175
-----------
Total selling, general and administrative expenses 290,222
-----------
Operating loss (106,081)
Other income (expense):
Interest expense (6,189)
Interest income 3
Gain on sale of assets 19,435
Other expense (525)
Bad debt recovery --
-----------
Total other income (expense) 12,724
Net loss $ (93,357)
===========
Net loss per share $ .01
===========
Shares used in computing per share information 8,775,685
===========
See notes to financial statements and auditors' report.
F-5
<PAGE>
NUMED SURGICAL, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
<S> <C>
Cash flows from operating activities:
Net loss $ (93,357)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation, amortization and write off of long lived assets 68,605
Gain from the sale of assets (19,435)
Provision for bad debts write off of long lived assets 9,492
Increase (decrease) in cash due to net changes in operating
assets and liabilities:
Accounts receivable (12,757)
Inventories 43,384
Prepaid expenses and other current assets -
Accounts payable (6,387)
Accrued expenses (12,584)
---------
Net cash used in operating activities (23,039)
---------
Cash flows from investing activities -
Proceeds from sale of product line 92,695
---------
Cash flows from financing activities:
Proceeds from short-term borrowings 23,000
Payments on line of credit (64,544)
Net cash used in financing activities (41,544)
---------
Increase (decrease) in cash 28,112
Cash at beginning of period 7,229
Cash at end of period $ 35,341
==========
</TABLE>
See notes to financial statements and auditors' report.
F-6
<PAGE>
NUMED SURGICAL, INC.
FOR THE YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
---------------------------------------------------------------- NET ASSETS
COMMON STOCK (DEFICIENCY) IN
------------------------ PAID-IN ACCUMULATED LIQUIDATION AT
SHARES VALUE CAPITAL DEFICIT TOTAL MARCH 31, 1997
----------- ---------- --------- ------------ ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Balance at March 31,
1996 8,775,685 $ 8,776 473,222 (392,939) 89,059 -
Net loss - - - (93,357) (93,357) -
----------- ---------- --------- ------------ ---------- --------------
Balances at March 31,
1997 before liquidation
basis of accounting 8,775,685 8,776 473,222 (486,296) (4,298) -
Changes in basis of
accounting - (8,776) (473,222) 486,296 4,298 (4,298)
----------- ---------- --------- ------------ ---------- --------------
Balances at March 31,
1997 after the liquidation
basis of accounting 8,775,685 $ - - - - (4,298)
=========== ========== ========= ============ ========== ==============
</TABLE>
See notes to financial statements and auditors' report.
F-7
<PAGE>
NUMED SURGICAL, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998 AND 1997
A. DESCRIPTION OF THE COMPANY AND BASIS OF PRESENTATION OF SALE OF ASSETS
NuMed Surgical, Inc. (NuMed or the Company) has been actively engaged
in the research, development and distribution of medical instruments
and surgical supplies since February 1991 to the health care market.
Effective March 31, 1997, the Company made the decision to sell its
remaining major product line to AMATECH Corporation (AMATECH) and
adopted a plan of liquidation. As a result, the assets remaining at
March 31, 1997 are recorded at net realizable value. All operating
assets were disposed of by March 31, 1998.
In an agreement effective March 31, 1997, NuMed sold approximately
$25,565 of inventory, $47,695 of accounts receivable and all other
assets pertaining to the business of design, manufacture, sales or
marketing of patient positioning products, disposables and pads to
AMATECH. Consideration given to NuMed was the payment of its $64,544
line of credit and forgiveness of the $27,695 of accounts payable to
AMATECH and $456 cash. The Company recorded a gain of $19,435 as a
result of the sale.
B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SALES
Provision has been made for returns of certain surgical medical
products for which customers are entitled to a fourteen day trial
evaluation. Credit is extended based on an evaluation of the customer's
financial condition and collateral is not generally required.
INVENTORIES
Inventories are carried at the lower of cost or net realizable value.
The cost of inventories is determined under the first-in, first-out
(FIFO) method. Inventories consist mainly of surgical table accessories
and assisted living products.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities, and disclosure of contingent assets and liabilities at the
date of the financial statements. Estimates also affect the reported
amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
F-8
<PAGE>
(continued)
NUMED SURGICAL, INC.
NOTES TO FINANCIAL STATEMENTS
EARNINGS PER SHARE
In the fourth quarter of fiscal 1998, the Company adopted Statement of
Financial Accounting Standards No. 128, Earnings Per Share (SFAS 128).
Under SFAS 128, basic net loss per share of common stock is computed by
dividing income available to common stockholders by the weighted
average number of common shares actually outstanding during the period.
Diluted net loss per share of common stock presents income attributable
to common shares actually outstanding plus dilutive potential common
shares outstanding during the period.
C. LONG-LIVED ASSETS
In the fourth quarter of fiscal 1997, NuMed wrote off the balance of
long-lived assets to amortization expense of $34,849 in accordance with
FASB Statement No. 121, "Accounting for the Impairment of Long-Lived
Assets and Assets to be Disposed of". The long-lived assets included
organizational costs, an exclusive distribution agreement, leasehold
improvements and prototype equipment which have no realizable value at
March 31, 1997 given management's intent to liquidate the Company as
discussed in Note A.
D. INCOME TAXES
Deferred taxes reflect the impact of temporary differences between the
financial statements and tax bases of assets and liabilities primarily
relating to net operating losses.
MARCH 31,
1998 1997
--------- ---------
Deferred tax assets:
Total deferred tax assets $ 185,894 203,350
Total deferred tax liability -
Valuation reserve (185,894) (203,350)
--------- ---------
Net deferred tax asset $ - -
========= =========
Due to the existence of the net operating losses that have been fully
reserved, no provision for income tax is required for 1998 or 1997. Net
operating loss carryforwards of approximately $451,000 expire through
years 2009 and 2013.
F-9
<PAGE>
NUMED SURGICAL, INC.
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1998
(UNAUDITED)
F-10
<PAGE>
NUMED SURGICAL, INC.
STATEMENTS OF NET DEFICIENCY IN LIQUIDATION
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1998 1998
------------------ -------------------
(UNAUDITED) (AUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 4,714 8,254
Accounts receivable 13,270 13,270
Allowable for bad debts (13,270) (13,270)
---------- ----------
Total assets $ 4,714 8,254
========== ==========
LIABILITIES AND NET DEFICIENCY
Current liabilities:
Accounts payable 875 3,875
Accrued expenses 16,437 16,437
---------- ----------
Total current liabilities 17,312 20,312
---------- ----------
Net deficiency in liquidation, attributable to
8,775,685 shares $ (12,598) (12,058)
=========== ==========
</TABLE>
F-11
<PAGE>
NUMED SURGICAL, INC.
STATEMENT OF CHANGES IN NET DEFICIENCY IN LIQUIDATION
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
1998 1997
------------ ------------
<S> <C> <C>
Increase in net liabilities in liquidation:
Sales $ - -
Bad debt recovery - 3,101
Decreases in net liabilities in liquidation:
Professional fees 500 500
Office expense 40 176
---------- ---------
Increase (decrease) in net
liabilities in liquidation (540) 2,425
Beginning net liabilities in liquidation (12,058) (32,137)
---------- ---------
Ending net liabilities in liquidation $ (12,598) (29,712)
=========== =========
Gain (loss) per share:
Gain (loss) attributable to common stockholders $ (540) 2,425
========== =========
Net gain (loss) per common share (basic and
diluted) $ - -
========== =========
Weighted average common stock outstanding
(basic and diluted) 8,775,685 8,775,685
========== =========
</TABLE>
F-12
<PAGE>
NUMED SURGICAL, INC.
STATEMENT OF CHANGES IN NET DEFICIENCY IN LIQUIDATION
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30,
1998 1997
------------ -------------
<S> <C> <C>
Increase in net liabilities in liquidation:
Sales $ - 3,918
Bad debt recovery - 3,101
Decreases in net liabilities in liquidation:
Cost of goods sold - 8,109
Professional fees 3,875 12,000
Occupancy - 6,432
Office expense 60 176
Other - 5,716
---------- ----------
Decrease in net liabilities in liquidation (3,935) (25,414)
Beginning net assets in liquidation (8,663) (4,298)
---------- ----------
Ending net liabilities in liquidation $ (12,598) (29,712)
========== ==========
Loss per share:
Loss attributable to common stockholders $ (3,935) (25,414)
========== ==========
Net loss per common share (basic and diluted) $ - -
========== ==========
Weighted average common stock outstanding
(basic and diluted) 8,775,685 8,775,685
========== ==========
</TABLE>
F-13
<PAGE>
NUMED SURGICAL, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
NOTE A - BASIS OF PRESENTATION
GENERAL:
The accompanying interim financial statements are unaudited, but reflect all
adjustments which are, in the opinion of the Company's management necessary to
present fairly the financial position as of September 30, 1998. The results for
the three months ended September 30, 1998 are not necessarily indicative of
results to be expected for the full year. References should be made to the
Company's Form 10-KSB for the year ended March 31, 1998, for additional
disclosure.
ITEM 2:
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
INTRODUCTION:
The following is an analysis of the operations of NuMed Surgical for the three
months ended September 30, 1998 and 1997 and should be read in conjunction with
the Company's financial statements that appear elsewhere in this report.
RESULTS OF OPERATIONS:
The Company ceased operations on April 1, 1997 and liquidated the "patient
positioning" assets. The Company ceased operations due to continued losses
caused by increased competition and the loss of exclusivity of patient
positioning products. Also, the Company was never able to find an acceptable
industry partner to enter into a joint venture on the Liftmate Product which was
acquired in 1995. The Company did not have adequate internal resources to pursue
the "Liftmate" market on its own. The "patient positioning" product line was
where most of the sales of the Company were coming from since the inception of
the Company. The Company had no sales activity for the three months ended
September 30, 1998. This decrease is due to the fact that the Company ceased
operations.
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES:
The Company's cash and cash equivalents at September 30, 1998 and March 31, 1998
were $4,714 and $8,274, respectively. The change is minimal due to the Company's
liquidation.
F-14
<PAGE>
NUTRICEUTICALS.COM CORPORATION
FINANCIAL STATEMENTS
OCTOBER 31, 1998
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
F-15
<PAGE>
INDEPENDENT AUDITORS' REPORT
Shareholders
Nutriceuticals.Com, Corporation:
We have audited the accompanying balance sheet of Nutriceuticals.Com
Corporation as of October 31, 1998, and the related statement of income,
stockholders' equity, and cash flows for the period September 8, 1998 (date of
inception) to October 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Nutriceuticals.Com
Corporation at October 31, 1998, and results of its operations and its cash
flows for the period September 8, 1998 (date of inception) to October 31, 1998
in conformity with generally accepted accounting principles.
Kirkland, Russ, Murphy & Tapp
Clearwater, Florida
November 4, 1998
F-16
<PAGE>
NUTRICEUTICALS.COM CORPORATION
BALANCE SHEET
OCTOBER 31, 1998
ASSETS
Current assets:
Cash $ 116,000
Prepaid expenses 14,000
---------
Total current assets 130,000
Organization costs 1,428
$ 131,428
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 1,428
Stockholders' equity:
Preferred stock, no par value, 1,000,000 shares authorized,
no shares issued or outstanding -
Common stock, no par value, 9,000,000 shares authorized,
2,400,000 shares issued and outstanding 24,000
Additional paid-in capital 106,000
Retained earnings -
---------
Total stockholders' equity 130,000
---------
$ 131,428
=========
See accountants' audit report and accompanying notes to financial statements.
F-17
<PAGE>
NUTRICEUTICALS.COM CORPORATION
STATEMENT OF INCOME
FOR THE PERIOD SEPTEMBER 8, 1998 (DATE OF INCEPTION)
TO OCTOBER 31, 1998
Revenues $ -
Cost of revenues -
-----
Gross profit -
Selling, general and administrative expenses -
-----
Net income $ -
=====
See accountants' audit report and accompanying notes to financial statements.
F-18
<PAGE>
NUTRICEUTICALS.COM CORPORATION
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD SEPTEMBER 8, 1998 (DATE OF INCEPTION)
TO OCTOBER 31, 1998
<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON PAID-IN RETAINED STOCKHOLDERS'
STOCK CAPITAL EARNINGS EQUITY
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Balances at September 8, 1998 $ - - - -
Initial capital contributions 20,000 10,000 - 30,000
Sale of common stock at $.25
per share 4,000 96,000 - 100,000
Net income - - - -
---------- ------------- --------- --------------
Balances at October 31, 1998 $ 24,000 106,000 - 130,000
========== ============= ========= ==============
</TABLE>
See accountants' audit report and accompanying notes to financial statements.
F-19
<PAGE>
NUTRICEUTICALS.COM CORPORATION
STATEMENT OF CASH FLOWS
FOR THE PERIOD SEPTEMBER 8, 1998 (DATE OF INCEPTION)
TO OCTOBER 31, 1998
Cash flows from operating activities:
Net income $ -
Adjustment to reconcile net income to net cash from
operating activities:
Increase in prepaid expenses (14,000)
Increase in accounts payable 1,428
---------
Net cash used in operating activities (12,572)
---------
Cash flows from investing activities:
Increase in organizational costs (1,428)
---------
Net cash used in investing activities (1,428)
---------
Cash flows from financing activities:
Initial capital contributions 30,000
Sale of common stock 100,000
---------
Net cash provided by financing activities 130,000
---------
Net increase in cash 116,000
Cash at beginning of period -
---------
Cash at end of period $ 116,000
=========
See accountants' audit report and accompanying notes to financial statements.
F-20
<PAGE>
NUTRICEUTICALS.COM CORPORATION
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1998
(1) DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) DESCRIPTION OF BUSINESS
Nutriceuticals.Com, Corporation (the Company) will provide
vitamin and nutritional sales through it's website on the
Internet.
(b) CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments
purchased with an original maturity of three months or less
to be cash equivalents.
(c) CONCENTRATION OF CREDIT RISK
The Company maintains its demand bank accounts at high
credit quality financial institutions. The balances, at
times, may exceed federally insured limits.
(d) INCOME TAXES
Effective September 8, 1998, the Company adopted Statement
of Financial Accounting Standards (SFAS) No. 109,
"Accounting for Income Taxes." Under the asset and liability
method of SFAS No. 109, deferred tax assets and liabilities
are recognized for the future tax consequences attributable
to differences between the financial statement carrying
amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary
differences are expected to be recovered or settled.
(e) ESTIMATES
In preparing financial statements in conformity with
generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenues and
expenses during the reporting period. Actual results could
differ from those estimates.
F-21
<PAGE>
NUTRICEUTICALS.COM CORPORATION & NUMED SURGICAL, INC.
(UNAUDITED PRO FORMA CONDENSED STATEMENT OF INCOME
FOR THE PERIOD ENDED OCTOBER 31, 1998)
F-22
<PAGE>
NUTRICEUTICALS.COM CORPORATION & NUMED SURGICAL, INC.
UNAUDITED PRO FORMA CONDENSED BALANCE SHEETS AS OF OCTOBER 31, 1998
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
NUTRICEUTICALS NUMED ADJUSTMENTS TOTAL
-------------- ------------ ----------- ----------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash $ 116,000 $ 4,714 $ -- $ 120,714
Prepaid expenses 14,000 -- -- 14,000
---------- ------------ ---------- ---------
Total current assets $ 130,000 $ 4,714 $ -- $ 134,714
Organization costs 1,428 -- -- 1,428
---------- ------------ ---------- ---------
$131,428 $ 4,714 $ -- $ 136,142
========== ============ ========== =========
LIABILITIES
Current liabilities:
Accounts payable $ 1,428 $ 875 $ -- $ 2,303
Accrued expenses -- 16,437 - 16,437
---------- ------------ ---------- ---------
Total current liabilities $ 1,428 $ 17,312 $ -- $ 18,740
========== ============ ========== =========
STOCKHOLDERS' EQUITY
Common stock 24,000 -- (21,424)(1) 2,576
Additional paid-in-capital 106,000 -- 21,424 (1) 127,424
Retained earnings(deficit) -- (12,598) -- (12,598)
---------- ------------ ---------- ---------
Total stockholders' equity 130,000 (12,598) -- 117,402
---------- ------------ ---------- ---------
Total liabilities and
stockholders equity $ 131,428 $ 4,714 $ -- $ 136,142
========== ============ ========== =========
</TABLE>
- ----------
(1) To give effect to the one-for-fifty Reverse Stock Split and the Merger of
Nutriceuticals with and into NuMed.
F-23
<PAGE>
NUTRICEUTICALS.COM CORPORATION & NUMED SURGICAL, INC.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF INCOME
FOR THE PERIOD ENDED OCTOBER 31, 1998
<TABLE>
<CAPTION>
NUTRICEUTICALS NUMED PRO FORMA
FOR THE PERIOD FOR THE SEVEN PRO FORMA FOR THE SEVEN
SEPTEMBER 8, 1998 MONTHS ENDED ADJUSTMENTS MONTHS ENDED
TO OCTOBER 31, 1998 OCTOBER 31, 1998 OCTOBER 31, 1998 OCTOBER 31, 1998
------------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Revenues $ -- $ -- $ -- $ --
Cost of Revenues -- -- -- --
------------ ------------ ----------- ------------
Gross Profit -- -- -- --
Selling, general and
administrative expenses -- (3,935) -- (3,935)
------------ ------------ ----------- ------------
Net income (loss) $ -- $ (3,935) $ -- $ (3,935)
============ ============ =========== ============
</TABLE>
F-24
<PAGE>
APPENDIX B
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
NUMED SURGICAL, INC.
AND
NUTRICEUTICAL.COM CORPORATION
DATED AS OF NOVEMBER __ , 1998
B-1
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into this day of November , 1998, by and among NuMed Surgical, Inc., a Nevada
corporation ("NuMed"), and Nutriceuticals.com Corporation, a Florida corporation
("Nutriceuticals").
W I T N E S S E T H:
WHEREAS, NuMed desires to acquire all of the 2,400,000 issued and
outstanding shares of the common stock, no par value, of Nutriceuticals, through
the merger of Nutriceuticals with and into NuMed pursuant to the terms
hereinafter set forth (the "Merger");
WHEREAS, the respective Boards of Directors of NuMed and Nutriceuticals deem
it advisable and to the advantage and welfare of their respective corporations
and stockholders, that Nutriceuticals be merged with and into NuMed upon the
terms and conditions hereinafter specified;
WHEREAS, for Federal income tax purposes, it is intended that the Merger
shall qualify as a reorganization within the meaning of Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained in this Agreement, the parties hereto, intending to be
legally bound hereby, agree as follows:
ARTICLE I
DESCRIPTION OF TRANSACTION
1.1 THE MERGER. At the Effective Time (as defined in Section 1.3 herein), in
accordance with this Agreement and the relevant provisions of the Nevada General
Corporations Law (the "Nevada GCL") and the Florida Business Corporations Act
(the "FBCA"), Nutriceuticals shall be merged with and into NuMed. NuMed shall be
the surviving corporation of the Merger and NuMed shall continue, and be deemed
to continue, for all purposes after the Merger, and the existence of
Nutriceuticals shall cease at the Effective Time. At the Effective Time (as
defined in Section 1.3) each issued and outstanding share of the common stock,
no par value, of Nutriceuticals ("Nutriceuticals Common Stock") shall be
converted into the right to receive one (1) share of common stock, $.001 par
value per share, of NuMed ("NuMed Common Stock").
1.2 SURVIVING CORPORATION; CERTIFICATE OF INCORPORATION OF SURVIVING
CORPORATION. Following the Merger, NuMed shall continue to exist under, and be
governed by, the laws of the State of Nevada. The Articles of Incorporation of
NuMed, as in effect on the Closing Date (as defined in Section 1.4 herein),
shall continue in full force and effect as the Articles of Incorporation of
NuMed, except that upon the Merger the Articles of Incorporation of NuMed shall
be amended to change the name of the corporation to "Nutriceuticals.com
Corporation".
1.3 EFFECTIVE DATE OF THE MERGER. This Agreement shall be submitted to the
stockholders of NuMed and to the stockholders of Nutriceuticals, as provided in
Sections 6.5 and 7.5 hereof, for approval as soon as practicable after the
execution of this Agreement. Upon the authorization, approval and adoption of
(i) this Agreement by (a) the affirmative vote of the holders of at least a
majority of the outstanding shares of NuMed Common Stock entitled to vote
thereon as provided by Nevada GCL, and (b) the affirmative vote of the holders
B-2
<PAGE>
of at least a majority of the outstanding shares of Nutriceuticals Common Stock
entitled to vote thereon as provided by the FBCA; and (ii) the Reverse Stock
Split (as defined below in this Section 1.4) by the affirmative vote of the
holders of at least a majority of the outstanding shares of NuMed Common Stock
entitled to vote thereon as provided by Nevada GCL; a Plan and Articles of
Merger (the "Articles of Merger") meeting the requirements of the Nevada GCL and
meeting the requirements of the FBCA shall be executed, verified and
acknowledged as required by the provisions of said laws, and such Articles of
Merger shall be delivered to the Department of State of Nevada and to the
Department of State of Florida (the "Departments of State") for filing (the time
of the latter of such filings being the "Effective Time", and the date of the
latter of such filings being the "Effective Date"). The term "Reverse Stock
Split" shall mean a one-for-fifty reverse split of the outstanding shares of
NuMed Common Stock and the delivery of an amendment of NuMed's Articles of
Incorporation to the Nevada Department of State, said amendment reflecting said
stock split.
1.4 PROCEDURE FOR CLOSING. Subject to the satisfaction or appropriate waiver
of all conditions precedent thereto, there shall be a closing (the "Closing") at
the offices of Schifino & Fleischer, P.A., One Tampa City Center, 201 North
Franklin Street, Suite 2700, Tampa, Florida 33602, at 10:00 a.m., or at such
other place, date and time as the parties to this Agreement may otherwise agree
(the "Closing Date"). At the Closing, the parties to this Agreement will take
all actions as may be necessary to cause the filing of the Articles with the
Departments of State.
1.5 CONVERSION OF STOCK. Upon the filing of the Articles by the Departments
of State, each issued and outstanding share of Nutriceuticals Common Stock,
other than any share with respect to which a dissenting stockholder shall have
demanded fair payment for such share in accordance with the FBCA, shall be
converted immediately into one (1) share of NuMed Common Stock, as provided in
Section 1.1 hereof.
1.6 DIRECTORS AND OFFICERS. The directors of NuMed, after the Effective Date
of the Merger, who shall hold office until the next annual meeting of
shareholders and until their successors are chosen and qualified are as follows:
NAME
----
Jugal K. Taneja
Stephen M. Watters
William L. LaGamba
Mandeep K. Taneja
The principal officers of NuMed, after the Effective Date of the Merger, who
shall hold office until their successors are chosen and qualified are as
follows:
NAME POSITION
---- --------
Stephen M. Watters President
William L. LaGamba Secretary
B-3
<PAGE>
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF NUMED
Except as disclosed in Exhibit "B" to this Agreement, NuMed represents and
warrants to Nutriceuticals the following:
2.1 ORGANIZATION AND STANDING. NuMed is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada and
has the corporate power and authority to carry on its business as it is now
being conducted. A true and correct copy of (i) its Articles of Incorporation
together with all amendments thereto, certified by the Secretary of the State of
Nevada, and (ii) its by-laws, certified by the Secretary of such corporation,
each as then in effect, has been delivered to Nutriceuticals.
2.2 CAPITALIZATION. The authorized capital stock of NuMed consists of
20,000,000 shares of common stock, par value $.001 per share, and as of the date
of this Agreement there are outstanding 8,775,685 shares, all of which have been
validly issued and are fully paid and non-assessable.
2.3 AUTHORITY RELATIVE TO THIS AGREEMENT. The execution of this Agreement by
NuMed and the delivery of this Agreement to Nutriceuticals have been duly
authorized by the Board of Directors of NuMed, and no further corporate or other
action is necessary on their part to make this Agreement valid and binding upon
and enforceable against NuMed in accordance with the terms hereof or to carry
out the transaction contemplated hereby.
2.4 FINANCIAL STATEMENTS. Attached to this Agreement as Exhibit "C" are the
Form 10-KSB Report for the year ended March 31, 1998 and the Form 10-QSB for the
six months ended September 30, 1998 containing the financial statements of NuMed
for the fiscal year ended March 31, 1998 and September 30, 1998, respectively.
Except as contemplated by this Agreement and the transactions contemplated by
this Agreement, those statements (i) are in accordance with the books and
records of NuMed; (ii) have been prepared in accordance with generally accepted
accounting principles, applied on a consistent basis; and (iii) fairly present
the results of operations and financial condition of NuMed for the periods
covered by the statements.
2.5 NO MATERIALLY ADVERSE CHANGE. Subsequent to the period covered by the
financial statements described in Section 2(d) of this Agreement, except as
contemplated by this Agreement or the transactions contemplated by this
Agreement, NuMed has not experienced any materially adverse change in its
financial condition, assets, liabilities, or results of operations.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NUTRICEUTICALS
Except as disclosed in Exhibit "D" to this Agreement, Nutriceuticals hereby
represents and warrants to NuMed the following:
B-4
<PAGE>
3.1 ORGANIZATION AND STANDING. Nutriceuticals is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida, and has the corporate power and authority to carry on its business as
it is now being conducted.
3.2 CAPITALIZATION. The authorized capital stock of Nutriceuticals consists
of 1,000,000 shares of preferred stock, no par value; and 9,000,000 shares of
common stock, no par value. As of the date of this Agreement there are
outstanding 2,400,000 shares common stock only, all of which have been validly
issued and are fully paid and non-assessable.
3.3 AUTHORITY RELATIVE TO THIS AGREEMENT. The execution and delivery of this
Agreement by Nutriceuticals has been duly authorized by its Board of Directors,
and no further corporate action will be necessary on their part to make this
Agreement valid and binding upon each of them and enforceable against them in
accordance with the terms of this Agreement, or to carry out the actions
contemplated by this Agreement.
3.4 FINANCIAL STATEMENTS. Attached to this Agreement as Exhibit "E" are the
financial statements of Nutriceuticals at October 31, 1998 and for the period
from September 8, 1998 (date of inception) through October 31, 1998.
3.5 NO MATERIALLY ADVERSE CHANGE. Subsequent to the period covered by the
financial statements described in Section 3.4 herein, except as contemplated by
this Agreement or the transactions contemplated by this Agreement,
Nutriceuticals has not experienced any materially adverse change in its
financial condition, assets, liabilities, or results of operations.
ARTICLE IV
COVENANTS OF NUMED
NuMed hereby covenants the following:
4.1 APPROVAL BY STOCKHOLDERS. Prior to the Closing, the shareholders of
NuMed, shall have approved the Merger in accordance with the provisions of the
Nevada GCL.
4.2 CONDUCT OF THE BUSINESS UNTIL CLOSING. Except as Nutriceuticals may
otherwise consent in writing, prior to the Closing NuMed will not conduct any
operations and will use its best efforts to preserve the present business
organization intact.
4.3 CORPORATE ACTION; APPROVALS AND CONSENTS. NuMed will take all corporate
and other action and use its best efforts to obtain in writing as promptly as
possible all approvals and consents required to be obtained in order to
effectuate the consummation of the transactions contemplated by this Agreement.
4.4 ADVICE OF CHANGES. Between the date of this Agreement and the Closing,
NuMed will promptly advise Nutriceuticals in writing of any fact which, if
existing or known at the date of this Agreement, would have been required to be
set forth in or disclosed pursuant to this Agreement.
B-5
<PAGE>
4.5 ACCESS TO PROPERTIES AND RECORDS, ETC. NuMed will give Nutriceuticals
and its counsel, accountants, and other representatives full access during
normal business hours to all of the properties, personnel, books, tax returns,
contracts, commitments and records of NuMed.
4.6 MERGER PROXY OR INFORMATION STATEMENT. NuMed will prepare the Merger
Proxy or Information Statement and, at the time when mailed to the stockholders
of NuMed and at all times up to the date of approval of the Merger by the
stockholders of NuMed, the Merger Proxy or Information Statement will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated or necessary to be included by or in the Merger Proxy or
Information Statement in order to make the Merger Proxy or Information Statement
and the statements therein not misleading; and the Merger Proxy or Information
Statement will comply in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
ARTICLE V
COVENANTS OF NUTRICEUTICALS
Nutriceuticals hereby jointly and severally covenants the following:
5.1 APPROVAL BY STOCKHOLDERS. Prior to the Closing, the shareholders of
Nutriceuticals, shall approve the Merger in accordance with the provisions of
the FBCA.
5.2 CONDUCT OF THE BUSINESS UNTIL CLOSING. Except as NuMed may otherwise
consent in writing, prior to the Closing Nutriceuticals will not conduct any
operations and will use its best efforts to preserve the present business
organization intact.
5.3 CORPORATE ACTIONS, APPROVALS AND CONSENTS. Nutriceuticals will take all
corporate and other actions and use their best efforts to obtain in writing as
promptly as possible all approvals and consents required to be obtained in order
to effectuate the consummation of the Merger and the transactions contemplated
hereby.
5.4 ADVICE OF CHANGES. Between the date of this Agreement and the Closing,
Nutriceuticals will promptly advise NuMed in writing of any fact which, if
existing or known at the date of this Agreement, would have been required to be
set forth in or disclosed pursuant to this Agreement.
5.5 ACCESS TO PROPERTIES AND RECORDS, ETC. Nutriceuticals will give NuMed
and its counsel, accountants, and other representatives full access during
normal business hours to all of the properties, personnel, books, tax returns,
contracts, commitments and records of Nutriceuticals.
5.6 MERGER PROXY OR INFORMATION STATEMENT. Nutriceuticals will cooperate
with and will provide all information reasonably requested in writing by NuMed
in connection with the preparation by NuMed of any proxy or information
statements to be sent to the shareholders of NuMed in connection with the
Merger; and Nutriceuticals will use its best efforts to assure that any such
information provided in writing to NuMed, at the time when provided and at all
times up to the date of approval of the Merger by the stockholders of NuMed,
does not and will not contain any untrue statement of a material fact required
to be stated or necessary in order to make such information not misleading.
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ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF NUMED
The obligations of NuMed under this Agreement are subject to the
satisfaction, at or prior to the Closing, or each of the following conditions
(the fulfillment of any of which may be waived in writing by NuMed).
6.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties and statements of Nutriceuticals contained in this Agreement, all
exhibits to this Agreement and any documents delivered in connection with this
Agreement, shall not only have been true and complete as of the date of this
Agreement and when made but shall also be true and complete as though again made
on the Closing Date, except to the extent that they are incorrect as of the
Closing Date by reason of events occurring after the date of this Agreement in
compliance with the terms of this Agreement.
6.2 COMPLIANCE. Nutriceuticals shall have performed and complied with all
agreements, covenants and conditions required by this Agreement and all exhibits
to this Agreement to be performed and complied with by it at or prior to the
Closing.
6.3 GOOD STANDING CERTIFICATES. NuMed shall have received a certificate
executed by the Secretary of State of the State of Florida dated within ten (10)
days prior to the Closing Date certifying that Nutriceuticals is a corporation
in good standing under the laws of the State of Florida.
6.4 CERTIFICATE. NuMed shall have received a certificate executed by the
President of Nutriceuticals, attested to by the Secretary of such corporation
under its corporate seal, dated the Closing Date, satisfactory in form and
substance to NuMed and its counsel, certifying as to (i) the fulfillment of
matters set forth in Section 6.1 through 6.3 of this Agreement, (ii) the
resolutions adopted by the Board of Directors of Nutriceuticals approving the
execution of this Agreement and the consummation of the transactions
contemplated hereby; (iii) the resolutions adopted by the stockholders of
Nutriceuticals approving the Merger; (iv) the incumbent officers of
Nutriceuticals and the authenticity of the signatures of each; and (v) the
information, if any, required to be furnished to Nutriceuticals pursuant to
Section 4(c) of this Agreement.
6.5 STOCKHOLDER APPROVAL. Holders of a majority of the outstanding shares of
common stock of Nutriceuticals entitled to vote on the Merger shall have
approved the Merger in accordance with the provisions of the FBCA.
6.6 DISSENTERS' RIGHTS. There shall not be holders of more than five percent
(5%) of the issued and outstanding shares of NuMed Common Stock and/or
Nutriceuticals Common Stock, collectively, who exercise dissenter's rights under
the Nevada GCL or the FBCA, respectively.
6.7 STOCKHOLDER LIST. Nutriceuticals shall have delivered to NuMed a list of
the stockholders of record as of the close of business on the last business day
immediately preceding the Closing.
6.8 CONSUMMATION OF THE MERGER. The Merger shall have been consummated on or
before January 31, 1999.
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ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF NUTRICEUTICALS
The Obligations of Nutriceuticals under this Agreement are subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(the fulfillment of any of which may be waived in writing by Nutriceuticals):
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties and statements of NuMed contained in this Agreement, all exhibits to
this Agreement and any documents delivered in connection with this Agreement,
shall not only have been true and complete on the date of this Agreement and
when made but shall also be true and complete as though again made on the
Closing Date, except to the extent that they are incorrect as of the Closing
Date by reason of events occurring after the date of this Agreement in
compliance with the terms of this Agreement.
7.2 COMPLIANCE. NuMed shall have performed and complied with all agreements,
covenants and conditions required by this Agreement and all exhibits to this
Agreement to be performed and complied with by them at or prior to the Closing.
7.3 GOOD STANDING CERTIFICATES. Nutriceuticals shall have received a
certificate executed by the Department of the State of Nevada dated within ten
(10) days prior to the Closing Date certifying that NuMed is a corporation in
good standing under the laws of the State of Nevada.
7.4 CERTIFICATE. Nutriceuticals shall have received a certificate executed
by the President of NuMed and attested to by its Secretary under its corporate
seal, dated the Closing Date, and certifying as to (i) the fulfillment of the
matters mentioned in Section 7.1 through 7.3 of this Agreement; (ii) the
resolutions adopted by the Board of Directors of NuMed approving the execution
of this Agreement and the consummation of the transactions contemplated hereby;
(iii) the resolutions adopted by the shareholders, of the capital stock of
NuMed, approving the Merger and this Agreement and the transactions contemplated
by this Agreement; (iv) the incumbent officers of the respective corporation and
the authenticity of the signatures of each; and (v) the information, if any,
required to be furnished to Nutriceuticals pursuant to Section 5(d) of this
Agreement.
7.5 STOCKHOLDER APPROVAL. Holders of a majority of the outstanding shares of
common stock of NuMed entitled to vote on the Merger shall have approved the
Merger in accordance with the provisions of the Nevada GCL.
7.6 DISSENTERS' RIGHTS. There shall not be holders of more than five percent
(5%) of the issued and outstanding shares of NuMed Common Stock and/or
Nutriceuticals Common Stock, collectively, who exercise dissenter's rights under
the Nevada GCL or the FBCA, respectively.
7.7 STOCKHOLDER LIST. NuMed shall have delivered to Nutriceuticals a list of
the stockholders of record as of the close of business on the last business day
immediately preceding the Closing.
7.8 CONSUMMATION OF THE MERGER. The Merger shall have been consummated on or
before January 31, 1999.
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ARTICLE VIII
ADDITIONAL TERMS OF TERMINATION
8.1 INDEMNIFICATION. After the Effective Time, NuMed shall indemnify, defend
and hold harmless the current and former directors and officers of NuMed and
Nutriceuticals against all losses, expenses, claims, damages, or liabilities
arising out of actions or omissions occurring at or prior to the Effective Time
to the fullest extent permitted under Nevada law and by the NuMed Articles of
Incorporation and the NuMed Bylaws as in effect on the date of the Merger
Agreement, including provisions relating to advances of expenses incurred in
defense of any litigation.
8.2 MUTUAL TERMINATION. In addition to the provisions of Articles 6 and 7 of
this Agreement, this Agreement may be terminated before the Closing by mutual
written agreement of the Boards of Directors of the parties to this Agreement.
ARTICLE IX
GENERAL
9.1 WAIVERS. No action taken pursuant to this Agreement, including any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement contained in this Agreement or in any document
delivered in connection with this Agreement. The waiver by any party to this
Agreement of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach.
9.2 SPECIFIC PERFORMANCE; REMEDIES. The parties to this Agreement
acknowledge that the performance of their respective obligations under this
Agreement is essential to the consummation of the transactions contemplated by
this Agreement. Each of them further acknowledges that neither party will have
an adequate remedy at law if the other party fails to perform its obligations
under this Agreement. In such event, each party shall have the right, in
addition to any other rights it may have, to compel specific performance of this
Agreement.
9.3 EXPENSES. Each of the parties to this Agreement shall pay its own
expenses in connection with this Agreement and the transactions contemplated by
this Agreement, including the fees and expenses of its counsel and its certified
public accountants and other experts.
9.4 CONFIDENTIALITY. If the transactions contemplated by this Agreement are
not consummated and are terminated pursuant to Articles VI, VII, or VIII of this
Agreement, then each of the parties to this Agreement agrees to keep
confidential and shall not use for its own benefit any of the information
(unless in the public domain) obtained from any other party and shall promptly
return to such other parties all schedules, documents or other written
information (without retaining copies thereof) previously obtained from such
other parties.
9.5 NOTICES. All notices, requests, demands and other communications which
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given if personally delivered or if mailed, first
class mail, postage prepaid, to:
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If to NuMed:
NuMed Surgical, Inc.
7270 Sawgrass Point Drive
Pinellas Park, Florida 33782
If to Nutriceuticals:
Nutriceuticals.com Corporation
6950 Bryan Dairy Road
Largo, Florida 33777
or to such other address as such party shall have specified by notice in writing
to the other parties.
9.6 ENTIRE AGREEMENT; AMENDMENT. This Agreement (including the exhibits to
this Agreement and all documents and papers delivered pursuant to this Agreement
and any written amendments to this Agreement executed by the parties to this
Agreement) constitutes the entire agreement, and supercedes all prior agreements
and understandings, oral and written, among the parties to this Agreement with
respect to the subject matter of this Agreement.
9.7 ASSIGNABILITY. This Agreement shall not be assignable by any of the
parties to this Agreement without the prior written consent of all other parties
to this Agreement.
9.8 VENUE; PROCESS. The parties to this Agreement agree that jurisdiction
and venue shall properly lie in the Thirteenth Judicial Circuit of the State of
Florida, in and for Hillsborough County, Tampa, Florida, or in the United States
District for the Middle District of Florida (Tampa Division), with respect to
any legal proceedings arising from this Agreement. Such jurisdiction and venue
are merely permissive; and, jurisdiction and venue would otherwise be proper.
The parties further agree that the mailing of any process shall constitute valid
and lawful process against them.
9.9 COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
9.10 SECTION AND OTHER HEADINGS. The section and other headings contained in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.
9.11 GOVERNING LAW. This Agreement has been negotiated and prepared and will
be performed in the State of Florida, and the validity, construction and
enforcement of, and the remedies under, this Agreement shall be governed in
accordance with the laws of the State of Florida (except any choice of law
provision of Florida law shall not apply if the law or state or jurisdiction
other than Florida would apply thereby).
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IN WITNESS WHEREOF, this Agreement has been signed by an officer of each of
the parties to this Agreement and duly authorized and attested under the
corporate seal by the Secretary of each of such parties, all on the date first
above written.
ATTEST:
NUTRICEUTICALS.COM CORPORATION
(Corporate Seal)
By:
- ---------------------------- ----------------------------
Secretary President
ATTEST: NUMED SURGICAL, INC.
(Corporate Seal)
By:
- ---------------------------- ----------------------------
Secretary President
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