SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. 1)
Check the appropriate box:
<TABLE>
<S> <C>
[X] Preliminary proxy statement. [ ] Confidential, for use of the Commission only
[ ] Definitive proxy statement. (as permitted by Rule 14a-6(e)(2)).
[ ] Definitive additional materials.
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
</TABLE>
NUMED SURGICAL, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as specified in its Charter)
None.
- --------------------------------------------------------------------------------
(Name of person(s) Filing Proxy 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 14a-6(i)(1) 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
- --------------------------------------------------------------------------------
[X] 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:
- --------------------------------------------------------------------------------
<PAGE>
NUMED SURGICAL, INC.
7270 Sawgrass Point Drive
Pinellas Park, Florida, 33782
January 25, 1999
Dear NuMed 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"
or the "Company") 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 Wednesday February 24, 1999, at 9:30 a.m., local time.
As described in the enclosed Proxy Statement, 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 common stock, $.001 par value per
share, of NuMed ("NuMed Common Stock"). 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 development stage,
Florida corporation ("Nutriceuticals.com"), with and into NuMed, with NuMed as
the corporation surviving the Merger, pursuant to an Agreement and Plan of
Merger, dated January 15, 1999, by and among NuMed and Nutriceuticals.com (the
"Merger Agreement"). The Merger Agreement provides that the shareholders of
Nutriceuticals.com will receive, after consummation of the Reverse Stock Split,
one (1) share of NuMed Common Stock in exchange for each issued and outstanding
share of common stock, no par value per share, of Nutriceuticals.com.
Further information concerning the Reverse Stock Split and the Merger
is contained in the accompanying Notice of Special Meeting and the Proxy
Statement. The Proxy 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 THE NUMED SHAREHOLDERS, HAS UNANIMOUSLY
APPROVED BOTH PROPOSALS, AND RECOMMENDS THAT THE NUMED SHAREHOLDERS VOTE "FOR"
APPROVAL OF THE REVERSE STOCK SPLIT AND THE MERGER AGREEMENT.
YOUR VOTE IS IMPORTANT! The Company's Board of Directors would greatly
appreciate your attendance at the Special Meeting. HOWEVER, WHETHER OR NOT YOU
PLAN TO ATTEND THE ANNUAL MEETING, IT IS VERY IMPORTANT THAT YOUR SHARES BE
REPRESENTED. Accordingly, please sign, date, and return the enclosed proxy card
which will indicate your vote upon the various matters to be considered. If you
do attend the meeting and desire to vote in person, you may do so by withdrawing
your proxy at that time.
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,
/s/ JUGAL K. TANEGA
--------------------
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 FEBRUARY 24, 1999
-----------------------------------------
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 Wednesday, February
24, 1999, 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 January 15, 1999 (the "Merger
Agreement") by and between Nutriceuticals.com Corporation, a
development stage, Florida corporation ("Nutriceuticals.com") and
NuMed, pursuant to which Nutriceuticals.com 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.com will be converted into one (1) share of NuMed Common
Stock, (ii) NuMed's corporate name will be changed to
"Nutriceuticals.com Corporation," and (iii) the officers and directors
of Nutriceuticals.com 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 Proxy Statement and a copy of the Merger Agreement is attached
thereto as Appendix B.
NuMed Shareholders may have certain dissenter's rights in connection
with the proposed Merger. Shareholders' dissenter's rights are more fully
discussed in the accompanying Proxy Statement and a copy of the relevant
sections of the Nevada Revised Statutes are attached thereto as Appendix C.
Only Shareholders of record at 5:00 p.m., Eastern Standard Time, on
January 15, 1999, are entitled to receive notice of, and to vote at, the Special
Meeting. EACH SHAREHOLDER, EVEN THOUGH HE OR SHE MAY PRESENTLY INTEND TO ATTEND
THE SPECIAL MEETING, IS REQUESTED TO SIGN AND DATE THE ENCLOSED PROXY CARD AND
TO RETURN IT WITHOUT DELAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. Any
shareholder present at the Special Meeting may withdraw his or her proxy and
vote in person on each matter brought before the Special Meeting.
By Order of the Board of Directors
/s/ Jugal K. Taneja
Jugal K. Taneja,
Pinellas Park, Florida CHAIRMAN OF THE BOARD
January 25, 1999
<PAGE>
PROXY STATEMENT
OF
NUMED SURGICAL, INC.
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON
FEBRUARY 24, 1999
-----------------------------------------
This Proxy Statement is being furnished to the holders ("Shareholders")
of the common stock, par value $.001 per share, of NuMed Surgical, Inc., a
Nevada corporation ("NuMed" or the "Company"), in connection with the
solicitation, by the Company's Board of Directors (the " Board of Directors"),
of proxies for use at the Special Meeting of the Shareholders to be held on
Wednesday, February 24, 1999 at the offices of Schifino & Fleischer, P.A., One
Tampa City Center, 201 North Franklin Street, Suite 2700, Tampa, Florida 33602,
and at any adjournment or postponement thereof (the "Special Meeting").
At the Special Meeting 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. 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 48,000,000 shares or change the par value of the NuMed Common
Stock. 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
all fractional shares will be rounded up to the nearest whole share. As of
January 15 , 1999, the number of outstanding shares 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.
If the Reverse Stock Split is approved at the Special Meeting,
Shareholders will also be asked to consider and vote upon a proposal to approve
an Agreement and Plan of Merger dated as of January 15, 1999 (the "Merger
Agreement") by and between Nutriceuticals.com Corporation, a development stage,
Florida corporation ("Nutriceuticals.com"), and NuMed. The Merger Agreement
provides for the merger of Nutriceuticals.com with and into NuMed, with NuMed
being the surviving corporation (the "Merger"). Upon consummation of the Merger
and the Reverse Stock Split, each issued and outstanding common share, no par
value, of Nutriceuticals.com ("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 of 2,400,000 shares or approximately ninety-three
percent (93%) of the then outstanding shares of NuMed Common Stock, on a
post-Reverse Stock 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 NuMed and
Nutriceuticals.com have overlapping Boards of Directors and a common principal
shareholder. In addition, the aggregate fair market value of the Merger
Consideration is not readily ascertainable because there is no active trading
market for the NuMed Common Stock, and because Nutriceuticals.com is a newly
formed, development stage, privately held company. Due to the limited
<PAGE>
resources of NuMed and Nutriceuticals.com, an outside financial advisor was not
engaged to ascertain the value or the fairness of the Merger Consideration.
NuMed has certain key relationships with Nutriceuticals.com. A
principal Shareholder of NuMed, Jugal K. Taneja, is also a principal shareholder
of Nutriceuticals.com. In addition, Mr. Taneja is the Chairman of the Board and
Chief Executive Officer ("CEO") of both NuMed and Nutriceuticals.com. Prior to
the Merger and the Reverse Stock Split, Mr. Taneja may be deemed to have
beneficial ownership of 27.56% of the shares of NuMed Common Stock. Giving
effect to both proposals, Mr. Taneja's beneficial ownership interest will be
17.4% of the surviving corporation. Robert P. Ottman and Paul A. Santostasi are
the only other members of the NuMed's Board of Directors. Mr. Santostasi is also
a director of Nutriceuticals.com, however Mr. Ottman is not. Pursuant to the
Merger Agreement, the officers and directors of Nutriceuticals.com will become
the officers and directors of NuMed, and accordingly, Mr. Ottman will not be a
director after the Merger.
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 the 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 29% of
the outstanding shares of NuMed Common Stock. Such persons intend to vote their
shares in favor of the Merger and the Reverse Stock Split. The shareholders of
Nutriceuticals.com have unanimously approved the Merger.
THE BOARD OF DIRECTORS BELIEVES THE REVERSE STOCK SPLIT AND THE MERGER
ARE IN THE BEST INTERESTS OF THE SHAREHOLDERS, HAS UNANIMOUSLY APPROVED BOTH
PROPOSALS, AND RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" APPROVAL OF THE
REVERSE STOCK SPLIT AND THE MERGER AGREEMENT.
All information set forth in this Proxy Statement with respect to NuMed
has been furnished by NuMed, and all information set forth herein with respect
to Nutriceuticals.com has been furnished by Nutriceuticals.com.
This Proxy Statement and the enclosed proxy card are first being sent
to Shareholders, together with the Notice of Special Meeting, on or about
January 25, 1999. SHAREHOLDERS ARE REQUESTED TO COMPLETE, DATE, AND SIGN THE
ACCOMPANYING FORM OF PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED WITH
THESE MATERIALS. No postage is necessary if the proxy is mailed in the United
States in the accompanying envelope.
<PAGE>
TABLE OF CONTENTS
PAGE NO.
--------
SUMMARY OF PROXY STATEMENT....................................................1
The Meeting..........................................................1
The Reverse Stock Split..............................................2
The Merger...........................................................4
Summary of Comparative Financial Data................................8
THE SPECIAL MEETING OF SHAREHOLDERS...........................................9
General Information..................................................9
Voting and Revocation of Proxies.....................................9
Solicitation of Proxies..............................................9
Record Date and Voting Rights.......................................10
Accountants.........................................................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....................................................13
Description of the Merger...........................................14
Effective Time of the Merger........................................14
Background of the Merger............................................14
The Merger Consideration............................................15
Reasons for the Merger and Recommendation of the NuMed Board........15
Conditions Precedent to the Merger..................................17
Modification, Waiver and Termination................................17
Failure to Approve the Merger.......................................17
Federal Tax Consequences............................................18
Interests of Certain Persons in the Merger..........................18
Certain Effects of the Merger on the Rights of NuMed and
Nutriceuticals.com Shareholders...................................19
Accounting Treatment................................................19
Restrictions on Resales of NuMed Common Stock Issued in the Merger..19
Expenses ...........................................................19
Rights of Dissenting Shareholders...................................20
PRICE RANGE OF COMMON STOCK AND DIVIDENDS....................................21
Market Prices.......................................................21
Dividends...........................................................21
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS................................21
NuMed ...........................................................21
Nutriceuticals.com..................................................22
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS...............25
i
<PAGE>
MANAGEMENT...................................................................26
Directors and Executive Officers of NuMed...........................26
Directors and Officers of Nutriceuticals.com........................27
Proposed Officers and Directors of Surviving Corporation............27
Director Meetings and Committees....................................28
Compensation of Directors...........................................29
Certain Relationships and Related Transactions......................29
Section 16(a) Beneficial Ownership Reporting Compliance.............29
COMPENSATION OF EXECUTIVE OFFICERS...........................................29
Summary Compensation Table..........................................29
SUMMARY COMPENSATION TABLE...................................................30
DESCRIPTION OF CAPITAL STOCK.................................................30
Common Stock........................................................30
NuMed Preferred Stock...............................................30
EXPERTS......................................................................31
SHAREHOLDER PROPOSALS........................................................31
APPENDICES
APPENDIX A..................................................................A-1
APPENDIX B..................................................................B-1
APPENDIX C..................................................................C-1
ii
<PAGE>
SUMMARY OF PROXY STATEMENT
THE FOLLOWING IS A BRIEF SUMMARY OF CERTAIN INFORMATION SET FORTH
ELSEWHERE IN THIS PROXY 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 PROXY STATEMENT AND
THE ANNEXES HERETO. SHAREHOLDERS OF NUMED ARE URGED TO READ THIS PROXY STATEMENT
AND THE ANNEXES HERETO IN THEIR ENTIRETY.
CERTAIN STATEMENTS CONTAINED IN THIS PROXY 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 Wednesday,
February 24, 1999, 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. See, THE
SPECIAL MEETING OF SHAREHOLDERS -
GENERAL INFORMATION.
Record Date.............................January 15, 1999. See, THE SPECIAL
MEETING OF SHAREHOLDERS - RECORD DATE
AND VOTING RIGHTS.
Securities Entitled To Vote.............The holders of record at the close of
business on January 15, 1999 (the "
Record Date") of shares of NuMed Common
Stock are entitled to notice of and to
vote at the Special Meeting. See, THE
SPECIAL MEETING OF SHAREHOLDERS - RECORD
DATE AND VOTING RIGHTS.
Matter to be Considered.................At the Special Meeting, Shareholders
will be asked to consider and vote on a
proposal to amend the Company'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.com will merge with and
into NuMed and Nutriceuticals.com's
shareholders will receive one (1) share
1
<PAGE>
of NuMed Common Stock for each share of
Nutriceuticals.com's common stock 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
five (5) 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. See, THE SPECIAL MEETING OF
SHAREHOLDERS - RECORD DATE AND VOTING
RIGHTS.
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
SHAREHOLDERS - RECORD DATE AND VOTING
RIGHTS.
Shares Owned by Directors
and Officers.......................The directors and executive officers of
NuMed and their affiliates beneficially
own approximately 29% 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 SHAREHOLDERS
- RECORD DATE AND VOTING RIGHTS; and
PROPOSAL II - 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 as a result
of the Merger, by reducing the number of
such shares presently outstanding, and
thereby significantly reducing the
number
2
<PAGE>
of such shares to be issued in the
Merger. See, PROPOSAL I - REASONS FOR
THE REVERSE STOCK SPLIT.
Principal Effects ......................Based upon the number of shares of NuMed
Common Stock outstanding on January 15 ,
1999, 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
- 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 - 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 -
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").
See, PROPOSAL I - EFFECTIVE DATE.
Federal Income Tax Consequences ........The Reverse Stock Split will qualify as
a tax-free recapitalization for NuMed
and the 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 Shareholder's holding
period for the NuMed Common Stock after
the Reverse Stock Split will not change.
See, PROPOSAL I - FEDERAL INCOME TAX
CONSEQUENCES.
Appraisal Rights .......................Dissenting Shareholders have no
appraisal rights under Nevada law or
under the Company's Articles or By-laws
in
3
<PAGE>
connection with the Reverse Stock Split.
See, PROPOSAL I - DISSENTER'S RIGHTS.
THE MERGER
General ................................The Merger Agreement provides that
Nutriceuticals.com, a development stage
corporation, will be merged with and
into NuMed, with NuMed being the
corporation surviving the Merger. See,
PROPOSAL II - 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 year ended March
31, 1998, in which NuMed sold its major
product line and subsequently liquidated
the remaining portions of the business.
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. See,
PROPOSAL II - BACKGROUND OF THE MERGER.
Nutriceuticals.com.............Nutriceuticals.com is a development
stage company which was organized in
Florida in September 1998 to engage in
the Internet vitamin industry.
Nutriceuticals.com is presently
developing an Internet Website and a
transaction processing system to manage
inventory, orders and shipping. The
mailing address and telephone number of
the principal executive offices of
Nutriceuticals.com is 6950 Bryan Dairy
Road, Largo, Florida 33777, (813) 544-
8866. See, PROPOSAL II - BACKGROUND OF
THE MERGER.
Common Management .............NuMed has certain key relationships with
Nutriceuticals.com. A principal
Shareholder of NuMed, Jugal K. Taneja,
is also a principal shareholder of
Nutriceuticals.com. In addition, Mr.
Taneja is the Chairman of the Board and
Chief Executive Officer ("CEO") of both
NuMed and Nutriceuticals.com. Pursuant
to the Merger Agreement, the officers
and directors of Nutriceuticals.com will
become the officers and directors of
NuMed. See, PROPOSAL II - INTERESTS OF
CERTAIN PERSONS IN THE MERGER; and
MANAGEMENT.
Reasons for Merger .....................In the fourth quarter of the Company's
fiscal year ended March 31, 1998, NuMed
divested itself of its major product
line, and subsequently liquidated its
remaining assets.
4
<PAGE>
NuMed presently has no material assets
or liabilities. In October 1998, due to
the relationship of the management of
NuMed and Nutriceuticals.com,
consideration was given as to combining
the companies through a merger. The
Board of Directors unanimously approved
the Merger and the Merger Agreement
concluding that the Merger is in the
best interests of the Shareholders based
on several factors including the
following: (i) the comparable balance
sheets of the parties; (ii) the future
earning prospects of Nutriceuticals.com
and the vitamin/nutriceuticals industry
in general; and (iii) the relative
advantages and the risks of the Merger.
See, PROPOSAL II - REASONS FOR THE
MERGER AND RECOMMENDATION OF THE BOARD
OF DIRECTORS.
Merger Consideration....................Shareholders of Nutriceuticals.com will
receive in the Merger, in exchange for
each issued and outstanding share of
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 shareholders of
Nutriceuticals Common Stock pursuant to
the Merger Agreement are referred to
herein as the "Merger Consideration."
See, PROPOSAL II - THE MERGER
CONSIDERATION.
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
CONSIDERATION.
Conversion of
Nutriceuticals Common Stock .......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. See, PROPOSAL II - 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
5
<PAGE>
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 - EFFECTIVE
TIME OF MERGER.
Appraisal Rights........................Shareholders may be entitled to
appraisal rights in connection with the
Merger under the provisions of the
Nevada GCL. Any Shareholder who desires
to exercise his or her statutory
dissenter's rights must, before the vote
is taken, submit a written demand for
the payment of his or her shares.
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 - 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 - 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 NuMed Common Stock. 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.com 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 -
CONDITIONS PRECEDENT TO THE MERGER.
6
<PAGE>
Termination.............................The Merger Agreement may be terminated
before the consummation of the Merger by
either NuMed or Nutriceuticals.com under
various circumstances, including the
failure to consummate the Merger on or
before April 30, 1999. See, PROPOSAL II
- MODIFICATION, WAIVER, AND TERMINATION.
Accounting Treatment....................The Merger will be accounted for as a
capital transaction equivalent to the
issuance of stock by Nutriceuticals.com
for NuMed's net assets, accompanied by a
recapitalization of Nutriceuticals.com.
See, PROPOSAL II - 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 - REASONS
FOR THE MERGER AND RECOMMENDATION OF THE
NUMED BOARD.
Failure to Approve the Merger...........If the Merger is not approved by the
requisite vote imposed by applicable
Nevada law, the Merger Agreement will be
terminated, and both the proposed Merger
and Reverse Stock Split will be
abandoned.
[Remainder of page intentionally left blank.]
7
<PAGE>
SUMMARY OF COMPARATIVE FINANCIAL DATA
NuMed was engaged in the health care industry from 1993 until the
fourth quarter of its fiscal year ended March 31, 1998, 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.com is a development stage
company which was organized in the State of Florida in September 1998, to engage
in the Internet vitamin/nutriceuticals industry. Nutriceuticals.com has not yet
commenced operations.
A summary of comparative balance sheet data for NuMed and
Nutriceuticals.com is set forth below. The financial statements of NuMed and
Nutriceuticals.com, and a Pro Form Balance Sheet are attached as Appendix A
hereto.
<TABLE>
<CAPTION>
NUTRICEUTICALS.COM CORPORATION & NUMED SURGICAL, INC.
UNAUDITED PRO FORMA CONDENSED BALANCE SHEETS AS OF OCTOBER 31, 1998
PRO FORMA PRO FORMA
NUTRICEUTICALS.COM 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 (4) 25,000 41,437
-------- --------- -------- --------
Total current liabilities $ 1,428 $ 17,312 $ 25,000 $ 43,740
======== ========= ======== ========
STOCKHOLDERS' EQUITY
Common stock 24,000 -- (1)(2) (21,424)(1) 2,576
Additional paid-in-capital 106,000 -- (1)(2)(3) 8,826 (1) 114,826
Retained earnings(deficit) -- (12,598)(3)(4) (12,402) (25,000)
-------- --------- -------- --------
Total stockholders' equity 130,000 (12,598) (25,000) 92,402
-------- --------- -------- --------
Total liabilities and
stockholders equity $131,428 $ 4,714 $ -- $136,142
======== ========= ======== ========
</TABLE>
- ------------
(1) To give effect to the 1 for 50 reverse stock split of the 8,775,685 shares
of $.001 par value common stock of NuMed. NuMed will have 175,500 shares
of outstanding post-split.
(2) To reflect the 1 for 1 exchange of 100% of the outstanding 2,400,000
shares of no par value common stock of Nutriceuticals.com for 2,400,000
shares of NuMed (post-split) $.001 par value common stock.
(3) To eliminate NuMed's accumulated deficit against additional paid-in
capital, as required in this recapitalization.
(4) To expense the cost of this merger transaction (i.e. legal, accounting,
printing).
NOTE Upon consummation of the recapitalization transaction, Nutriceuticals.com
will be presented as the continuing accounting entity, and as such, future
comparative numbers presented in the consolidated financial statements
will be the historical financial statements of Nutriceuticals.com.
8
<PAGE>
THE SPECIAL MEETING OF SHAREHOLDERS
GENERAL INFORMATION
This Proxy Statement is first being furnished to the holders of NuMed
Common Stock on or about January 25, 1999, 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 Wednesday, February 24,
1999, 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.
VOTING AND REVOCATION OF PROXIES
A Shareholder of NuMed may use the accompanying proxy if such
Shareholder is unable to attend the Special Meeting in person or wishes to have
his or her shares voted by proxy even if such Shareholder does attend the
meeting. A Shareholder may revoke any proxy given pursuant to this solicitation,
at any time before it is exercised, by (i) duly executing and submitting a
subsequently dated proxy, (ii) delivering a subsequently dated written notice of
revocation to the Company, which notice is received at or before the Special
Meeting, or (iii) voting in person at the Special Meeting (although, mere
attendance at the Special Meeting will not, in and of itself, constitute a
revocation of a proxy). Any written notice revoking a proxy should be sent to
the President of NuMed at the Company's principal executive offices, located at
7270 Sawgrass Point Drive, Pinellas Park, Florida, 33782. For such notice of
revocation or later proxy to be valid, however, it must actually be received by
NuMed prior to the vote of the Shareholders. All shares represented by valid
proxies received pursuant to this solicitation, and not revoked before they are
exercised, will be voted in the manner specified therein. If no specification is
made, the proxies will be voted "FOR" approval of the Reverse Stock Split and
the Merger Agreement.
The Board of Directors is unaware of any other matters that may 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. If other matters do properly come before the Special
Meeting, however, it is intended that the shares represented by proxies in the
accompanying form will be voted or not voted by the persons named in the proxies
in their discretion.
SOLICITATION OF PROXIES
Solicitation of proxies may be made in person or by mail, telephone, or
facsimile, or other form of communication by directors, officers, and employees
of NuMed, who will not be specifically compensated for such solicitation.
Nominees, fiduciaries, and other custodians will be requested to forward
solicitation materials to beneficial owners and to secure their voting
instructions, if necessary, and will be reimbursed for the expenses incurred in
sending proxy materials to beneficial owners.
No person is authorized to give any information or to make any
representation not contained in this Proxy Statement, and if given or made, such
information or representation should not be relied upon as having been
authorized by NuMed, Nutriceuticals.com, or any other person. The delivery of
this Proxy Statement shall not, under any circumstances, create any implication
that there has been no change in the business or affairs of NuMed or
Nutriceuticals.com since the date of this Proxy Statement.
9
<PAGE>
All costs of solicitation of proxies from NuMed Shareholders will be
borne by NuMed, including the printing costs of this Proxy Statement and related
materials.
RECORD DATE AND VOTING RIGHTS
The Board of Directors has fixed the close of business on January 15,
1999, as 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 (the "Record Date"). 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 900 beneficial holders.
Each share of NuMed Common Stock is entitled to one (1) vote on all matters
submitted to the Shareholders for approval. 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.
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, bylaws, or the board
of directors require a greater number of votes. Neither the Articles of
Incorporation or Bylaws of NuMed, nor its Board of Directors, requires a greater
number of votes. SINCE APPROVAL OF THE MERGER REQUIRES, IN ESSENCE, THE
AFFIRMATIVE VOTE OF A MAJORITY OF THE ISSUED AND OUTSTANDING SHARES OF NUMED
COMMON STOCK AS OF THE RECORD DATE, THE FAILURE OF A SHAREHOLDER TO VOTE SHARES
IN FAVOR OF THE MERGER AGREEMENT, FOR ANY REASON WHATSOEVER - WHETHER BY
WITHHOLDING THE VOTE, BY ABSTAINING, OR CAUSING A BROKER NON-VOTE - WILL HAVE
THE SAME EFFECT AS A VOTE CAST OPPOSING THE MERGER.
A broker non-vote generally occurs when a broker, who holds shares in
street name for a customer, does not have authority to vote on certain
non-routine matters because its customer has not provided any voting
instructions on the matter.
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, bylaws or state law requires a
greater number of votes. Accordingly, all abstentions and broker non-votes will
be counted as present for purposed of determining the existence of a quorum; but
since they are neither votes cast in favor of, nor votes cast opposing the
Reverse Stock Split, or another proposed action, abstentions and broker
non-votes will have no impact on the outcome of such matters and will not be
counted as a vote cast on such matters.
If the proposals to be presented at the Special Meeting are not
approved by the requisite vote imposed by applicable Nevada law, or if only one
of the two proposals is approved, but not the other, the Merger Agreement will
be terminated, and both the proposed Merger and Reverse Stock Split will be
abandoned.
ACCOUNTANTS
Kirkland, Russ, Murphy & Tapp, NuMed's principal accountants for the
most recently completed fiscal year is not expected to have a representative
present at the Special Meeting.
10
<PAGE>
PROPOSAL I
PROPOSAL TO EFFECT A ONE-FOR-FIFTY REVERSE SPLIT OF
THE OUTSTANDING SHARES OF NUMED COMMON STOCK
The 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 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 48,000,000 shares. As of January 15,
1999, 8,775,685 shares of NuMed Common 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
48,000,000 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 be affected by a significant change in
NuMed's net earnings. If a smaller number of shares is outstanding after the
Merger, 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
January 15, 1999, the proposed one-for-fifty Reverse Stock Split would decrease
the outstanding shares of NuMed Common Stock to approximately 175,500 shares,
held by approximately 540 shareholders of record. The proposed Reverse Stock
Split would not directly affect the Shareholders' proportionate equity interest
in NuMed or the proportionate voting power of any Shareholder. However,
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
11
<PAGE>
of NuMed's public Shareholders will be reduced from approximately 71% to 5%.
Whereas NuMed has no operations or significant assets, the Board believes that
the Reverse Stock Split, the Merger and resultant dilution of the 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.
<TABLE>
<CAPTION>
BEFORE REVERSE STOCK SPLIT AFTER REVERSE STOCK SPLIT
-------------------------- -------------------------
CLASS OF STOCK AUTHORIZED ISSUED AUTHORIZED ISSUED
- -------------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Common Stock 48,000,000 8,775,685 48,000,000 2,575,514*
Preferred Stock 2,000,000 0 2,000,000 0
</TABLE>
- ------------
* Includes 2,400,000 shares issuable to the shareholders of the
Nutriceuticals.com 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 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 Shareholders in
effecting the exchange of their certificates. 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 and the Merger by the
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 Shareholders, the
NuMed Common Stock held by 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
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. Furthermore, due to the financial condition of the
Company and the costs that would be incurred, no tax opinion will be obtained
from the Company's counsel. ACCORDINGLY, EACH 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 Shareholders, the proposed Reverse Stock Split
will qualify as a tax- free recapitalization for NuMed and the 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 Shareholder's holding period for NuMed Common Stock after the Reverse
Stock Split will not change.
DISSENTERS' RIGHTS
Dissenting 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 BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL
TO EFFECT A ONE-FOR-FIFTY REVERSE SPLIT OF NUMED COMMON STOCK.
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.
13
<PAGE>
DESCRIPTION OF THE MERGER
In accordance with the provisions of the Merger Agreement, at the
Effective Time, Nutriceuticals.com, a corporation whose operations are in the
development stage, will be merged with and into NuMed, which will be the
surviving corporation. The Articles of Incorporation and the Bylaws of NuMed 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.com. 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.com 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.com 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 five (5) 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 five (5) persons who will become
directors of NuMed at the Effective Time are Jugal K. Taneja, Stephen M.
Watters, William L. LaGamba, Paul A. Santostasi, 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.com, 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 to the Merger and Termination."
If approved by the NuMed Shareholders, the parties expect that the Effective
Time will occur on or before March 5, 1999.
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. In the fourth quarter
of the fiscal year ended March 31, 1998, the Board of Directors concluded that,
due to the existence of competitors with greater resources than NuMed's, the
value of NuMed's business would deteriorate over time
14
<PAGE>
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.com is a newly formed, development stage corporation,
which was organized in September 1998 to engage in the Internet
vitamin/nutriceuticals industry. See, "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Nutriceuticals.com." Mr. Jugal
K. Taneja is the Chairman of the Board and Chief Executive Officer ("CEO") of
both NuMed and Nutriceuticals.com, and he is also a principal shareholder of
both of the companies. See, "The Merger - Interests of Certain Persons in the
Merger."
In October 1998, as a result of the overlapping management and
ownership of NuMed and Nutriceuticals.com, consideration was given to combining
the two companies through a merger whereas, NuMed is a publicly reporting
corporation, and Nutriceuticals.com has a business plan and is capitalized with
$130,000. See the financial statements of Nutriceuticals.com in Appendix A.
THE MERGER CONSIDERATION
In the Merger, each issued and outstanding share of 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 the shareholders of Nutriceuticals.com 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.com, 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 pink sheets, there is 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. Due to the expense involved and the
financial condition of the Company, the NuMed Board did not obtain an outside
financial advisor to ascertain the value of the respective parties, or the value
or fairness of the Merger Consideration.
REASONS FOR THE MERGER AND RECOMMENDATION OF THE NUMED BOARD
The Board of Directors 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.com, or
the Merger 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.com is
capitalized with $130,000 and has a developing business plan.
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(ii) The future earning prospects of the
vitamin/nutriceuticals industry. Vitamin/nutriceuticals sales for the
industry as a whole were estimated to have been approximately $21
billion in 1997, and are expected to grow to approximately $30 billion
by the year 2000. Nutriceuticals is a development stage company, newly
organized to engage in the vitamin/nutriceuticals industry via the
Internet. Nutriceuticals.com 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.com estimates that such system will be completed by
March 31, 1999, at an aggregate cost of $60,000.
(iii) The perceived advantages of an online vs. a brick and
mortar (physical) store. Management believes that 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 risks of the Merger. The Board of Directors
identified the following risks in connection with the Merger: (a)
Nutriceuticals.com 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/nutriceuticals customers; (f) the estimated $60,000
cost of developing Nutriceuticals.com's Website and the search engine
and processing system for the Website; and (g) the uncertainty as to
the future regulation of the the Internet and the potential adverse
impact of any such regulation. The Board of Directors believes,
however, that these risks are outweighed by the potential benefits to
be realized from the Merger, because the Merger provides NuMed with
capital and a business plan. However, Nutriceuticals.com's existing
capital will not be sufficient to carry out the business plan past the
next three (3) months and the surviving corporation will need
additional capital. There can be no assurance that the surviving
corporation will be able to obtain such additional financing on
acceptable terms.
Each of the above factors supports, directly or indirectly the
determination of the Board of Directors as to the fairness, from a financial
point of view, of the Merger Consideration 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.com 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 because there is only one (1) independent director, on
the NuMed Board. See, "The Merger - Interests of Certain Persons in the Merger."
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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.com. The
shareholders of Nutriceuticals.com 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.com 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 further 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 Board
of Directors of Nutriceuticals.com and the NuMed Board. The Merger Agreement may
also be terminated by either Nutriceuticals.com or NuMed if the Merger is not
consummated by April 30, 1999, provided however, that the failure to consummate
the Merger by such date is not caused by the breach of the Merger Agreement by
the terminating party. The Merger Agreement will be terminated (i) if the
approvals of the Merger Agreement are not obtained from the shareholders of
NuMed or Nutriceuticals.com, or (ii) if the required approval of the Reverse
Stock Split by the NuMed Shareholders is not obtained.
FAILURE TO APPROVE THE MERGER
If the Merger is not approved by the requisite vote imposed by
applicable Nevada law, the Merger Agreement will be terminated, and both the
proposed Merger and Reverse Stock Split will be abandoned.
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FEDERAL TAX CONSEQUENCES
THE FOLLOWING IS A SUMMARY OF THE ANTICIPATED FEDERAL INCOME TAX
CONSEQUENCES OF THE PROPOSED MERGER UNDER THE CODE, AND IS INCLUDED IN THIS
PROXY STATEMENT FOR GENERAL INFORMATION ONLY. 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 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. IT DOES NOT INCLUDE CONSEQUENCES OF STATE, LOCAL, OR
OTHER TAX LAWS OR SPECIAL CONSEQUENCES TO PARTICULAR SHAREHOLDERS HAVING SPECIAL
SITUATIONS.
Neither NuMed nor Nutriceuticals.com intend to seek a ruling form the
Internal Revenue Service with respect to the tax consequences of the Merger.
Furthermore, due to the financial condition of the Company and the costs that
would be incurred, no tax opinion will be obtained from the Company's counsel.
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.
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 Shareholder who receives payment in cash as a result of the exercise of
rights as a dissenting shareholder; and (c) in the event of the receipt of cash
by any 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.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
GENERAL. Certain members of NuMed's and Nutriceuticals.com's 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.com, 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.com 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
Nutriceuticals.com's 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.com, will be remain as the Chairman of the Board of
NuMed after the Merger, and Paul A. Santostasi, a Director of NuMed will remain
as a Director of the surviving corporation. In addition, Mr. Taneja shall retain
his position as Chief Executive Officer of NuMed after the Merger. Stephen M.
Watters, who is the President and a Director of Nutriceuticals.com will be
appointed to the same positions with NuMed, as will William L. LaGamba, the
current Secretary and a Director of Nutriceuticals.com. 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.com against all losses,
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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 Articles of Incorporation and the Bylaws of NuMed 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 January 15, 1999, Mr Jugal K.
Taneja, and his family, owned in the aggregate 2,418,866 shares of NuMed Common
Stock, representing approximately 28% 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 members of 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. Mr. Taneja will beneficially own
17.4% of the NuMed Common Stock after the Merger. No other officer or director
of NuMed has beneficial ownership of any Nutriceuticals Common Stock. Similarly,
no other officer or director of Nutriceuticals.com has beneficial ownership of
any NuMed Common Stock.
CERTAIN EFFECTS OF THE MERGER ON THE RIGHTS OF NUMED AND
NUTRICEUTICALS.COM SHAREHOLDERS
The rights of shareholders of NuMed are presently governed by Nevada
law, and the rights of shareholders of Nutriceuticals.com 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
By-Laws of NuMed will be the Articles of Incorporation and By-Laws of the
surviving corporation.
ACCOUNTING TREATMENT
NuMed and Nutriceuticals.com believe, that for accounting and financial
reporting purposes, the Merger will be treated as a capital transaction
equivalent to the issuance of stock by Nutriceuticals.com for NuMed's net
monetary assets of approximately ($12,598) as of September 30, 1998, accompanied
by a recapitalization of Nutriceuticals.com.
RESTRICTIONS ON RESALES OF NUMED COMMON STOCK ISSUED IN THE MERGER
All shares of NuMed Common Stock received by Nutriceuticals.com's
shareholders in the Merger are being acquired for investment purposes only by
the shareholders of Nutriceuticals.com. 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 by 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 Proxy Statement and relating to the issuance of NuMed Common Stock
will be paid by NuMed. It is estimated that these expenses will approximate
$20,000.
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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 NRS RELATING TO DISSENTERS' RIGHTS. A COPY OF
THE APPLICABLE NRS ARE ATTACHED HERETO AS APPENDIX C. SHAREHOLDERS ARE URGED TO
READ APPENDIX C IN ITS ENTIRETY.
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. A VOTE AGAINST THE PROPOSED MERGER WILL NOT BE DEEMED TO SATISFY
THE SHAREHOLDER NOTICE REQUIREMENT. THE FAILURE TO VOTE AGAINST THE MERGER
PROPOSAL WILL NOT CONSTITUTE A WAIVER OF DISSENTER'S RIGHT, HOWEVER, A VOTE IN
FAVOR OF THE MERGER PROPOSAL WILL CONSTITUTE A WAIVER OF SUCH RIGHTS.
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:
(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. Within sixty (60) days of the receipt of a demand
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payment for the deficiency, the Company shall commence a proceeding and petition
the court to determine the fair value of the NuMed Common Stock and accrued
interest. If the Company does not commence the proceeding within the 60-day
period, it shall pay each dissenter whose demand remains unsettled the amount
demanded.
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
MARKET PRICES
NuMed Common Stock is listed in the "Pink Sheets" under the trading
symbol "NMDS," and as of January 15, 1999 the Common Stock was held of record by
approximately 540 persons. NuMed Common Stock has had a limited and sporadic
trading history. It has been reported to the Company that in 1998 there were
approximately nine (9) trades involving 407,800 shares at prices ranging from
$.01 to $.06 per share. On January 14, 1999, the day preceding the date that the
Merger Agreement was entered into, the high ask and low bid prices of the NuMed
Common Stock were each $.01 per share.
DIVIDENDS
Since its inception, NuMed has not paid any dividends on its Common
Stock. The Company does not anticipate the payment of any dividends for the
foreseeable future.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NUMED
GENERAL. NuMed was incorporated in 1993 by NuMed Home Health Care, Inc.
("NuMed HHC") for the purpose of spinning-off to the stockholders of NuMed HHC
the surgical/medical products division of NuMed HHC. Following such spin-off,
NuMed had been actively engaged in the research development and distribution of
medical instruments and surgical supplies to the health care market. The Company
had also been engaged in the contract manufacturing and distribution of products
for assistive living, self-care and homecare. Cognizant of the increasing
competition in its industry and NuMed's continuing losses, the Board of
Directors decided, in March of 1998, that NuMed should divest itself of its
major product line and liquidate its remaining business (the "Divestiture").
PROPERTY. NuMed maintains its principal executive offices and corporate
headquarters at 7270 Sawgrass Point Drive, Pinellas Park, Florida 33782.
Although NuMed believes that this property is in good condition and has been
adequate for its operations prior to the Divestiture, after the Merger, NuMed
intends to acquire new office space, finances permitting.
RESULTS OF OPERATIONS. The following analysis of the operations of
NuMed should be read in conjunction with the Company's financial statements that
appear in Appendix A to this Proxy Statement.
NuMed has had no revenues from operations since it ceased operations on
April 1, 1998 and liquidated its "patient positioning" and other assets. NuMed
ceased operations due to continued losses caused by increased competition and
the loss of exclusivity of patient positioning products. Also, NuMed was never
able to find an acceptable industry partner to enter into a joint venture on the
Liftmate Product which was acquired in 1995. NuMed did not have adequate
internal resources to pursue the "Liftmate" market on its own. The
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"patient positioning" product line was where most of the sales of NuMed were
coming from since the inception of NuMed in 1993.
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.
CHANGES IN ACCOUNTANTS. On June 17, 1998, NuMed dismissed Ernst &
Young, LLP as its principal independent accountant (the "Accountant"). The
decision to change the Accountant was approved by the NuMed Board, after the
assets of NuMed were liquidated. Neither (i) the Accountant's report dated June
29, 1997 on NuMed's financial statements for the year ended March 31, 1997, nor
(ii) the Accountant's report dated June 29, 1996 on NuMed's financial statements
for the year ended March 31, 1996, contained and adverse opinion or disclaimer
of opinion, or was modified as to uncertainty, audit scope, or accounting
principals. NuMed had no disagreements with the Accountant, on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which would have caused the Accountant to make reference to
the subject matter of the disagreement(s) in connection with its report, if not
resolved to the Accountant's satisfaction.
NUTRICEUTICALS.COM
GENERAL. Nutriceuticals.com is a newly formed, development stage
corporation, which was organized in September 1998 to engage in the Internet
vitamin/nutriceuticals industry. The nutritional supplements industry is highly
fragmented and intensely competitive. It includes companies that manufacture and
distribute products which are generally intended to enhance the body's
performance and well being. Nutritional supplements include vitamins, minerals,
dietary supplements, herbs, botanicals and compounds derived therefrom.
According to Packaged Facts, an independent consumer market research
firm, the retail market for nutritional supplements has experience an annual
compound growth rate in the United States of over fifteen percent (15%) from
1992 to 1996. Growth in the nutritional supplement market is driven by several
factors, including (i) the general public's heightened awareness and
understanding of the connection between diet and health; (ii) the aging
population, particularly the "babyboomer" generation which is more likely to
consume nutritional supplements; (iii) product introductions in response to new
scientific research; and (iv) the nationwide trend toward preventative medicine.
Experts believe that by the year 2000, consumers will make many of
their health choices from their home televisions or computers. This trend will
be a global phenomenon due to the development of satellite Internet delivery,
digital language translation systems, as well as continued improvement in
communications technology. Companies delivering quality, consumer-oriented,
digital health content will be in a position to dominate this emerging global
marketplace. As the use of the Internet becomes more prevalent globally, and as
digital translation systems become more refined, companies involved in the
Internet vitamin/nutriceuticals industry may be in demand by health consumers of
various cultures.
PLAN OF OPERATION. Nutriceuticals.com is in the process of developing a
Website to engage in the retailing of nutritional supplements via the Internet.
Nutriceuticals.com's Website is currently in the beta testing process, and
Nutriceuticals.com anticipates that its Website will be operational by March 31,
1999. Nutriceuticals.com can be reached via the Internet at
www.Nutriceuticals.com. Nutriceuticals.com is negotiating an arrangement with
Expressions Interactive, a software developing company based in Lexington,
Kentucky to keep it's Website operational and state-of-the-art.
Nutriceuticals.com intends to promote its
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Website through print and radio media, mass mailings of samples, and linking
with other websites by sharing revenue streams.
Nutriceuticals.com believes that the retail vitamin industry is
particularly suited for online retailing for many reasons. An online
vitamin/nutriceuticals store has virtually unlimited online shelf space and can
offer customers a vast selection through an efficient search and retrieval
interface. This is particularly valuable in the vitamin/nutriceuticals market
because the extraordinary number of different products precludes even the
largest physical vitamin store from stocking more than a small minority of
available brands, allowing Nutriceuticals.com to realize significant structural
cost advantages relative to a traditional brick and mortar store. In addition,
unlike physical stores, or even online retailers of clothing or other personal
products, customers of an online vitamin/nutriceuticals retailer can make
educated purchase decisions using online information.
Nutriceuticals.com believes that an online vitamin/nutriceuticals store
has the potential to eliminate or mitigate critical inefficiencies and problems
facing traditional vitamin distribution channels. Nutriceuticals.com's business
plan includes service to a large and global market through centralized
distribution and operations. In this regard, Nutriceuticals.com's business plan
includes the future acquisition of, or invest in, potential complementary
businesses such as distributors, manufacturers, and/or freight companies, for
the fulfillment and shipping of orders to Nutriceuticals.com's Internet
customers. Nutriceuticals.com's business plan also includes the future
acquisition of, or invest in, other Websites and Web service providers. However,
there can be no assurances that Nutriceuticals.com will be able to achieve such
vertical integration plans in the absence of adequate financing and successful
operations.
The business plans of Nutriceuticals.com is subject to various
uncertainties. As a development stage company, Nutriceuticals.com is subject to
the risks associated with establishing any new business. Nutriceuticals.com also
faces the additional risks inherent in operating with new and rapidly evolving
technology in an emerging market. Whereas online commerce is relatively new, and
its commercial acceptability is uncertain, Nutriceuticals.com cannot assure that
its online retail business will gain widespread acceptance with
vitamin/nutriceuticals consumers. The competitive environment of the nutritional
supplements industry in generally is presently characterized by numerous,
well-established, and well-capitalized companies. With minimal barriers to entry
into the online market, current and future competitors can launch new Websites
at a relatively low cost. The result may be increasingly intense competition in
the online market amongst nutritional supplement retailers, which could have a
negative impact on Nutriceuticals.com. In addition, the future regulatory
environment of the Internet is uncertain. Future regulation potentially may also
have an adverse impact on the proposed business of Nutriceuticals.com.
RESULTS OF OPERATIONS. Nutriceuticals.com has had no revenues since its
inception in September 1998. Expenses, for research and development of its
Website, were $25,000 as of December 31, 1998. It is estimated that
Nutriceuticals.com will require $60,000 to complete the development of its
Website.
Presently, Nutriceuticals.com has two (2) employees, Jugal K. Taneja,
Chief Executive Officer, and Stephen Watters, President. Both employees have
committed to take no salary until such time as Nutriceuticals.com has adequate
resources therefore. Nutriceuticals.com does not own or lease any office space
at this time, however, it is sharing office space, at no cost, with Dynamic
Health Products, Inc., a company controlled by Jugal K. Taneja.
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FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES. Nutriceuticals.com
estimates that it will need from $500,000 to $2 million in start up capital for
on-going Website development, marketing, promotions, and for general working
capital purposes. In addition, Nutriceuticals.com plans to hire additional
full-time management personnel and acquire separate office space as soon as the
funds therefore become available.
Nutriceuticals.com is currently negotiating for an equity investment,
from private sources, to fund its start up capital requirements. It is
anticipated that such equity investment will be completed in the first quarter
of 1999, following the Effective Time of the Merger. In the event that such
equity transaction does not occur, Nutriceuticals.com will continue to seek
equity and/or debt financing on attractive terms from various sources. There can
be no assurances that the necessary start up capital will become available in
the first quarter of 1999, shortly thereafter, or at all. In the event that
Nutriceuticals.com is not able to obtain the needed funds, Nutriceuticals.com
would not be able to commence operations or put its business plan into effect.
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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 January 15, 1999, by (i) each
Officer and Director of NuMed, (ii) each person known to NuMed to own
beneficially more than 5% of NuMed Common Stock, and (iii) all Directors and
Officers of NuMed as a group. As of January 15, 1999, there were approximately
8,775,685 NuMed Common Shares issued and outstanding.
<TABLE>
<CAPTION>
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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
Robert P. Ottman...................................................123,625 1.1%
6505 Rockside Road, Suite 400
Independence, Ohio 44131
Paul A. Santostasi.......................................................0 0
6505 Rockside Road, Suite 400
Independence, Ohio 44131
All Directors and Officers as a group (3 persons)................2,542,491 28.97%
</TABLE>
- ------------
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.
25
<PAGE>
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.
As trustee, Jugal K. Taneja has sole voting and investment power with
respect to all of the NuMed Common Stock held in the name of the trust.
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. Does not include shares held of record by The
First Delhi Trust or Westminster Trust Company, whose shares are
beneficially owned by her husband.
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%
Paul A. Santostasi 62 Director 0 0
</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.
Set forth below is the business experience and other biographical
information regarding the current Directors and Officers of NuMed.
JUGAL K. TANEJA has served as the Chief Executive Officer of NuMed
Surgical, Inc. from its inception in October 1993 until April 18, 1995, and from
January 1, 1996 until the present. He has also served as the President,
Secretary and a Director of NuMed since its inception. In addition, Mr. Taneja
currently serves as the Chairman of the Board and Chief Executive Officer of
Nutriceuticals.com since its inception in September 1998; as the Chairman of the
Board and Chief Executive Officer of NuMed Home Health Care, Inc., which
operates eight wholly-owned subsidiaries providing home health care services and
staffing, and contract rehabilitation staffing, since its inception in 1991; and
as the Chairman of the Board of Dynamic Health Products, Inc. since its
inception in 1991. Dynamic Health Products, Inc., is a manufacturer and
distributor of nutritional and health products, and the parent company of
Innovative Health Products, Inc.; Becan, Inc.; Incredible Products; and Nu-Wave
Health Products, Inc. Previously, Mr. Taneja served as Senior Vice President of
Union Commerce Bank and Huntington National Bank from 1979 to 1983.
26
<PAGE>
ROBERT P. OTTMAN has served as a Director of NuMed since its inception
in October 1993. Mr. Ottman has also served as a Director of NuMed Home Health
Care, Inc. since 1991. In early 1993, Mr. Ottman was elected Vice President of
Champion Bolt Corporation and is responsible for marketing and human resources.
PAUL A. SANTOSTASI has been the Chairman and Chief Executive Officer of
Diversified Technologies, Inc. a manufacturer and distributer of vitamin and
nutriceuticals products, from 1989 through the present. From June 1998 to the
present, he has also served as the Vice Chairman and a Director of Dynamic
Health Products, Inc. a manufacturer and distributer of nutritional and health
products. Mr. Santostasi was Chairman and Chief Executive Officer of Sun Coast
Plastics, Inc. a manufacturer of container closure devices, from 1978 through
1989. From 1976 to 1977, Mr. Santostasi was General Manager of the Plastics
Division for Tropicana Products. From 1957 to 1976, he worked as General Manger
for Bundy corporation where he was responsible for product development and
implementation of plastic molding, metal fabrication and harness assemblies. He
currently holds six (6) major product patents and two (2) machine patents in the
United States and the common market in Europe, and is responsible for the
development of over a dozen other patented products.
DIRECTORS AND OFFICERS OF NUTRICEUTICALS.COM
The following table sets forth for each director and executive officer
of Nutriceuticals.com information regarding his age, position(s)s with
Nutriceuticals.com, and the amount of Nutriceuticals Common Stock which he
beneficially owns.
<TABLE>
<CAPTION>
AMOUNT OF PERCENTAGE OF CLASS
NUTRICEUTICALS OF NUTRICEUTICALS
NAME AGE POSITION 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%
Paul A. Santostasi 62 Director 0 *
</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.
PROPOSED OFFICERS AND DIRECTORS OF SURVIVING CORPORATION
Pursuant to the terms of the Merger Agreement, 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.
27
<PAGE>
<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%
Paul A. Santostasi 62 Director 0 0
</TABLE>
Set forth below is the business experience and other biographical
information regarding the Officers and Directors of Nutriceuticals.com who will
become new Directors and/or Officers of NuMed after the Effective Time of
Merger.
STEPHEN M. WATTERS has been President and a Director of
Nutriceutical.com since the inception in September 1998. Mr. Watters was Vice
President of Finance of Dynamic Health Products, Inc., a manufacturer and
distributor of nutritional and health products, during September, October and
November 1998. Prior to his association with Dynamic Health Products, Mr.
Watters was in the investment banking and brokerage business. He served as Vice
President, Sales for Gilford Securities, from February 1998 to September 1998;
Vice President, Sales for Hobbs, Melville Corp., from November 1997 to February
1998; and as Branch Manager, Sales, with Schneider Securities, Inc. from 1995 to
1997. He received his Executive Masters of Business Administration Degree from
Case Western Reserve University in 1997.
WILLIAM K. LAGAMBA has been the Secretary and a Director of
Nutriceuticals.com since its inception in September 1998. Mr. LaGamba also
serves as the Chief Executive Officer and a Director of Dynamic Health Products,
Inc., a manufacturer and distributor of nutritional and health products, since
April 1998. 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,
from February 1985 to January 1997.
MANDEEP K. TANEJA has served as Director of Nutriceuticals.com since
its inception in September 1998. During the past five years, Mandeep Taneja
earned an undergraduate degree in Business Management from the University of
Rochester, and he is currently attending the University of Miami where he is in
his final year of law school. Mandeep Taneja has actively invested in various
venture capital activities and he is the son of Jugal Taneja.
DIRECTOR MEETINGS AND COMMITTEES
During the fiscal year ended March 31, 1998, the Board of Directors of
NuMed held a total of three (3) telephonic meetings. Each of the Directors
attended more than seventy-five percent (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.
28
<PAGE>
COMPENSATION OF DIRECTORS
The Company's Directors receive no annual retainer, $500 per meeting
for attendance at Board meetings, plus reimbursement of out-of-pocket expenses,
however, the Directors have agreed to a suspension of their Director
compensation for an indefinite period.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
It is presently contemplated that Nu-Wave Health Products, Inc.
("Nu-Wave") will serve as a supplier or vendor of vitamin/nutriceuticals
products to NuMed after the Merger, however, the extent of such service is not
presently ascertainable and will be based upon customer demand and product
availability. Nu-Wave is a subsidiary of Dynamic Health Products, Inc., a
manufacturer and distributor of nutritional and health products. Dynamic Health
Products, Inc. is approximately 56% beneficially owned and operated by Jugal K.
Taneja. Any products obtained by NuMed from Nu-Wave will be supplied on terms
which are not less favorable than those which NuMed could obtain from a
disinterested third party vendor or less favorable than those on which Nu-Wave
would sell to a disinterested third party.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934, as amended,
all executive officers, directors, and each person who is the beneficial owner
of more than 10% of the common shares of a company that files reports pursuant
to Section 12 of the Exchange Act, are required to report the ownership of such
common shares, options, and stock appreciation rights (other than certain
cash-only rights), and any changes in that ownership, with the Securities and
Exchange Commission (the "SEC"). Specific due dates for these reports have been
established, and the Company is required to report, in this Proxy Statement, any
failure to comply therewith during the fiscal year ended March 31, 1998. The
Company believes that all of these filing requirements are presently satisfied
by its Officers, Directors and by the beneficial owners of more than 10% of the
NuMed Common Stock, except (i) that Jugal K. Taneja, Robert P. Ottman, The First
Delhi Trust, The Westminster Trust Company, and Manju Taneja each have made an
inadvertently late filing of each's respective Form 3 (Initial Statement of
Beneficial Ownership of Securities), which form must be filed with the SEC
shortly after a person becomes an Officer or Director or 10% beneficial owner.
In making this statement, the Company has relied on copies of the reporting
forms received by it, and upon the written representations from certain
reporting persons that no Form 5 (Annual Statement of Changes in Beneficial
Ownership) were required to be filed under applicable rules of the SEC.
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The following summary compensation table sets forth all cash and/or
non-cash compensation paid to or accrued for the past three (3) fiscal years for
NuMed's Chief Executive Officers.
29
<PAGE>
<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 (2) 1998 0 0 0
Chief Executive Officer 1997 0 0 0
1996 0 0 0
</TABLE>
- ------------
1 There are no Officers of NuMed or other individuals whose compensation
from NuMed exceeded $100,000 in any of the past three (3) fiscal years.
2 Jugal K. Taneja has served as Chief Executive Officer from October 1993
through March 31, 1995 and from January 1, 1996 through the present.
DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
GENERAL. NuMed is authorized to issue 48,000,000 shares of NuMed Common
Stock, of which 8,775,685 shares were outstanding as of January 15, 1999. NuMed
Common Stock is traded on the "Pink Sheets" under the trading symbol "NMDS."
Registrar and Transfer Company acts as the transfer agent and the registrar for
NuMed Common Stock.
VOTING AND OTHER RIGHTS. The holders of NuMed Common Stock are entitled
to one (1) vote per share, and, in general, a majority of votes cast with
respect to a matter is sufficient to authorize action upon routine matters.
Directors are elected by a plurality of the votes cast, and each shareholder
entitled to vote in such election is entitled to vote each share of stock for as
many persons as there are directors to be elected. In elections for directors,
shareholders do not have the right to cumulate their votes.
In the event of liquidation, holders of NuMed Common Stock would be
entitled to receive PRO RATA any assets legally available for distribution to
shareholders with respect to shares held by them, subject to any prior rights of
any NuMed Preferred Stock (as defined and described below) then outstanding.
NuMed Common Stock does not have any preemptive rights, redemption
privileges, sinking fund privileges or conversion rights.
DISTRIBUTIONS. The holders of NuMed Common Stock are entitled to receive
such dividends or distributions as the NuMed Board may declare out of funds
legally available for such payments. The payment of distributions by NuMed is
subject the restrictions of Nevada law applicable to the declaration of
distributions by a business corporation. In addition, the payment of
distributions to shareholders is subject to any prior rights of outstanding
NuMed Preferred Stock. Share dividends, if any are declared, may be paid from
authorized but unissued shares.
NUMED PREFERRED STOCK
NuMed has authorized 2,000,000 shares of preferred stock, par value $.001
per share (the "NuMed Preferred Stock"). The NuMed Board has the authority to
issue NuMed Preferred Stock in one or more series and to fix the dividend
rights, dividend rate, liquidation preference, conversion rights, voting rights,
rights and
30
<PAGE>
terms of redemption (including sinking fund provisions), and the
number of shares constituting any such series, without any further action by the
shareholders, unless such action is required by applicable rules or regulations
or by the terms of other outstanding series of NuMed Preferred Stock. Any shares
of NuMed Preferred Stock which may be issued may rank prior to the NuMed Common
Stock as to payment of dividends and upon liquidation. There are no shares of
Preferred Stock outstanding as of January 15, 1999.
EXPERTS
The financial statements of NuMed as of March 31, 1998, have been
audited by Kirkland, Russ, Murphy & Tapp, independent auditors, Tampa, Florida,
as set forth in the report thereon, a copy which is attached hereto in Appendix
A. Another accounting firm audited the Company's financial statements as of
March 31, 1997, whose report thereon expressed an unqualified opinion on those
1997 statements. The report of said auditor, however, is not included in
Appendix A as a result of the undue financial hardship which would be incurred
in obtaining the consent to use such report.
The financial statements of Nutriceuticals.com as of October 31, 1998,
have been audited by Kirkland, Russ, Murphy & Tapp, independent auditors, Tampa,
Florida, as set forth in the report thereon, a copy of which is attached hereto
in Appendix A.
SHAREHOLDER PROPOSALS
Eligible Shareholders who wish to present proposals for action at the
1999 Annual Meeting of Shareholders should submit their proposals in writing to
the President of the Company at the address of the Company set forth on the
first page of this Proxy Statement. Proposals for inclusion in this year's proxy
statement and proxy card must be received by the President no later than March
31, 1999. A Shareholder is eligible to present proposals if, at the time he or
she submits a proposal or proposals, the Shareholder owns at least 1% or $1,000
in market value of Common Shares and has held such shares for at least one year,
and the Shareholder continues to own such shares through the date of the 1999
Annual Meeting.
NUMED SURGICAL, INC.
/s/ JUGAL K. TANEJA
---------------------------------
Date: January 25 , 1999 Jugal K. Taneja, Chief Executive Officer
31
<PAGE>
APPENDIX A
NUMED SURGICAL, INC.
FINANCIAL STATEMENTS
MARCH 31, 1998
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
AND
MARCH 31, 1997
(UNAUDITED)
A-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.
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
A-2
<PAGE>
<TABLE>
<CAPTION>
NUMED SURGICAL, INC.
STATEMENTS OF NET DEFICIENCY IN LIQUIDATION
YEARS ENDED MARCH 31, 1998 AND 1997
1998 1997
-------- --------
ASSETS (UNAUDITED)
<S> <C> <C>
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)
======== ========
</TABLE>
See notes to financial statements and auditors' report.
A-3
<PAGE>
<TABLE>
<CAPTION>
NUMED SURGICAL, INC.
STATEMENT OF CHANGES IN NET DEFICIENCY IN LIQUIDATION
YEAR ENDED MARCH 31, 1998
<S> <C>
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
===========
</TABLE>
See notes to financial statements and auditors' report.
A-4
<PAGE>
<TABLE>
<CAPTION>
NUMED SURGICAL, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1997
(UNAUDITED)
<S> <C>
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
===========
</TABLE>
See notes to financial statements and auditors' report.
A-5
<PAGE>
<TABLE>
<CAPTION>
NUMED SURGICAL, INC.
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 1997
(UNAUDITED)
<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.
A-6
<PAGE>
<TABLE>
<CAPTION>
NUMED SURGICAL, INC.
FOR THE YEAR ENDED MARCH 31, 1997
(UNAUDITED)
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 8,775,68 $ 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.
A-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.
A-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.
<TABLE>
<CAPTION>
MARCH 31,
----------------------------
1998 1997
--------- ---------
(unaudited)
<S> <C> <C>
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 $ -- --
========= =========
</TABLE>
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.
A-9
<PAGE>
NUMED SURGICAL, INC.
FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1998
(UNAUDITED)
A-10
<PAGE>
<TABLE>
<CAPTION>
NUMED SURGICAL, INC.
STATEMENTS OF NET DEFICIENCY IN LIQUIDATION
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>
A-11
<PAGE>
<TABLE>
<CAPTION>
NUMED SURGICAL, INC.
STATEMENT OF CHANGES IN NET DEFICIENCY IN LIQUIDATION
(UNAUDITED)
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>
A-12
<PAGE>
<TABLE>
<CAPTION>
NUMED SURGICAL, INC.
STATEMENT OF CHANGES IN NET DEFICIENCY IN LIQUIDATION
(UNAUDITED)
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>
A-13
<PAGE>
NUMED SURGICAL, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(unaudited)
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.
A-14
<PAGE>
NUTRICEUTICALS.COM, CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
FINANCIAL STATEMENTS
OCTOBER 31, 1998
(WITH INDEPENDENT AUDITORS' REPORT THEREON)
A-15
<PAGE>
INDEPENDENT AUDITORS' REPORT
Shareholders
Nutriceuticals.Com, Corporation:
We have audited the accompanying balance sheet of Nutriceuticals.Com,
Corporation, a development stage enterprise, 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.
November 4, 1998
Kirkland, Russ, Murphy & Tapp
A-16
<PAGE>
<TABLE>
<CAPTION>
NUTRICEUTICALS.COM, CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEET
OCTOBER 31, 1998
ASSETS
<S> <C>
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
========
</TABLE>
A-17
<PAGE>
<TABLE>
<CAPTION>
NUTRICEUTICALS.COM, CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF INCOME
FOR THE PERIOD SEPTEMBER 8, 1998 (DATE OF INCEPTION)
TO OCTOBER 31, 1998
<S> <C>
Revenues $--
Cost of revenues --
Gross profit --
Selling, general and administrative expenses --
---
Net income $--
===
</TABLE>
See accountants' audit report and accompanying notes to financial statements.
A-18
<PAGE>
<TABLE>
<CAPTION>
NUTRICEUTICALS.COM, CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD SEPTEMBER 8, 1998 (DATE OF INCEPTION)
TO OCTOBER 31, 1998
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>
A-19
<PAGE>
<TABLE>
<CAPTION>
NUTRICEUTICALS.COM, CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENT OF CASH FLOWS
FOR THE PERIOD SEPTEMBER 8, 1998 (DATE OF INCEPTION)
TO OCTOBER 31, 1998
<S> <C>
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
=========
</TABLE>
A-20
<PAGE>
NUTRICEUTICALS.COM, CORPORATION
(A DEVELOPMENT STAGE ENTERPRISE)
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), a development
stage enterprise, 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.
A-21
<PAGE>
APPENDIX B
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
NUMED SURGICAL, INC.
AND
NUTRICEUTICAL.COM CORPORATION
DATED AS OF JANUARY 15, 1999
B-1
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into this 15th day of January, 1999, by and among NuMed Surgical, Inc.,
a Nevada corporation ("NuMed"), and Nutriceuticals.com Corporation, a Florida
corporation ("Nutriceuticals.com").
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.com,
through the merger of Nutriceuticals.com with and into NuMed pursuant to the
terms hereinafter set forth (the "Merger");
WHEREAS, the respective Boards of Directors of NuMed and
Nutriceuticals.com deem it advisable and to the advantage and welfare of their
respective corporations and stockholders, that Nutriceuticals.com 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.com 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.com 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.com ("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.com, 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
Paul A. Santostasi
B-3
<PAGE>
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
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF NUMED
Except as disclosed in Exhibit "B" to this Agreement, NuMed represents
and warrants to Nutriceuticals.com 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.com.
2.2 CAPITALIZATION. The authorized capital stock of NuMed consists of
48,000,000 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.com 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
B-4
<PAGE>
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.COM
Except as disclosed in Exhibit "D" to this Agreement,
Nutriceuticals.com hereby represents and warrants to NuMed the following:
3.1 ORGANIZATION AND STANDING. Nutriceuticals.com 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.com
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.com 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.com 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.com 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.
B-5
<PAGE>
4.2 CONDUCT OF THE BUSINESS UNTIL CLOSING. Except as Nutriceuticals.com
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.com 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.
4.5 ACCESS TO PROPERTIES AND RECORDS, ETC. NuMed will give
Nutriceuticals.com 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.COM
Nutriceuticals.com hereby jointly and severally covenants the
following:
5.1 APPROVAL BY STOCKHOLDERS. Prior to the Closing, the shareholders of
Nutriceuticals.com, 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.com 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.com 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.
B-6
<PAGE>
5.4 ADVICE OF CHANGES. Between the date of this Agreement and the
Closing, Nutriceuticals.com 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.com 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.com.
5.6 MERGER PROXY OR INFORMATION STATEMENT. Nutriceuticals.com 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.com 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.
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.com 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.com 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.com 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.com, 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.com
approving the execution of this Agreement and the consummation of the
transactions contemplated hereby; (iii) the resolutions adopted by the
stockholders of Nutriceuticals.com approving the Merger; (iv) the incumbent
officers of Nutriceuticals.com and the authenticity of the signatures of each;
and
B-7
<PAGE>
(v) the information, if any, required to be furnished to Nutriceuticals.com
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.com 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.com Common Stock, collectively, who exercise dissenter's rights
under the Nevada GCL or the FBCA, respectively.
6.7 STOCKHOLDER LIST. Nutriceuticals.com 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 April 30, 1999.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF NUTRICEUTICALS.COM
The Obligations of Nutriceuticals.com 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.com):
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.com 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.com 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)
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the information, if any, required to be furnished to Nutriceuticals.com 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.com
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 April 30, 1999.
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.com 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
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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:
If to NuMed:
NuMed Surgical, Inc.
7270 Sawgrass Point Drive
Pinellas Park, Florida 33782
If to Nutriceuticals.com:
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
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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).
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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APPENDIX C
NEVADA REVISED STATUTES
SECTIONS 92A.300 TO 92A.500, INCLUSIVE
RIGHTS OF DISSENTING OWNERS
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RIGHTS OF DISSENTING OWNERS
Nevada Revised Statutes
NRS 92A.300 Definitions. As used in NRS 92A.300 to 92A.500, inclusive,
unless the context otherwise requires, the words and terms defined in NRS
92A.305 to 92A.335, inclusive, have the meanings ascribed to them in those
sections. (Added to NRS by 1995, 2086)
NRS 92A.305 "Beneficial stockholder defined. "Beneficial stockholder"
means a person who is a beneficial owner of shares held in a voting trust or by
a nominee as the stockholder of record. (Added to NRS by 1995, 2087)
NRS 92A.310 "Corporate action" defined. "Corporate action" means the
action of a domestic corporation. (Added to NRS by 1995, 2087)
NRS 92A.315 "Dissenter" defined. "Dissenter" means a stockholder who is
entitled to dissent from a domestic corporation's action under NRS 92A.380 and
who exercises that right when and in the manner required by NRS 92A.410 to
92A.480, inclusive. (Added to NRS by 1995, 2087)
NRS 92A.320 "Fair value" defined. "Fair value," with respect to a
dissenter's shares, means the value of the shares immediately before the
effectuation of the corporate action to which he objects, excluding any
appreciation or depreciation in anticipation of the corporate action unless
exclusion would be inequitable. (Added to NRS by 1995, 2087)
NRS 92A.325 "Stockholder" defined. "Stockholder" means a stockholder of
record or a beneficial stockholder of a domestic corporation. (Added to NRS by
1995, 2087)
NRS 92A.330 "Stockholder of record" defined. "Stockholder of record"
means the person in whose name shares are registered in the records of a
domestic corporation or the beneficial owner of shares to the extent of the
rights granted by a nominee's certificate on file with the domestic corporation.
(Added to NRS by 1995, 2087)
NRS 92A.335 "Subject corporation" defined. "Subject corporation" means
the domestic corporation which is the issuer of the shares held by a dissenter
before the corporate action creating the dissenter's rights becomes effective or
the surviving or acquiring entity of that issuer after the corporate action
becomes effective. (Added to NRS by 1995, 2087)
NRS 92A.340 Computation of interest. Interest payable pursuant to NRS
92A.300 to 92A.500, inclusive, must be computed from the effective date of the
action until the date of payment, at the average rate currently paid by the
entity on its principal bank loans or, if it has no bank loans, at a rate that
is fair and equitable under all of the circumstances. (Added to NRS by 1995,
2087)
NRS 92A.350 Rights of dissenting partner of domestic limited
partnership. A partnership agreement of a domestic limited partnership or,
unless otherwise provided in the partnership agreement, an agreement of merger
or exchange, may provide that contractual rights with respect to the partnership
interest of a dissenting general or limited partner of a domestic limited
partnership are available for any class or group of partnership interests in
connection with any merger or exchange in which the domestic limited partnership
is a constituent entity. (Added to NRS by 1995, 2088)
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NRS 92A.360 Rights of dissenting member of domestic limited-liability
company. The articles of organization or operating agreement of a domestic
limited-liability company or, unless otherwise provided in the articles of
organization or operating agreement, an agreement of merger or exchange, may
provide that contractual rights with respect to the interest of a dissenting
member are available in connection with any merger or exchange in which the
domestic limited-liability company is a constituent entity. (Added to NRS by
1995, 2088)
NRS 92A.370 Rights of dissenting member of domestic nonprofit
corporation. 1. Except as otherwise provided in subsection 2, and unless
otherwise provided in the articles or bylaws, any member of any constituent
domestic nonprofit corporation who voted against the merger may, without prior
notice, but within 30 days after the effective date of the merger, resign from
membership and is thereby excused from all contractual obligations to the
constituent or surviving corporations which did not occur before his resignation
and is thereby entitled to those rights, if any, which would have existed if
there had been no merger and the membership had been terminated or the member
had been expelled. 2. Unless otherwise provided in its articles of incorporation
or bylaws, no member of a domestic nonprofit corporation, including, but not
limited to, a cooperative corporation, which supplies services described in
chapter 704 of NRS to its members only, and no person who is a member of a
domestic nonprofit corporation as a condition of or by reason of the ownership
of an interest in real property, may resign and dissent pursuant to subsection
1. (Added to NRS by 1995, 2088)
NRS 92A.380 Right of stockholder to dissent from certain corporate
actions and to obtain payment for shares. 1. Except as otherwise provided in NRS
92A.370 and 92A.390, a stockholder is entitled to dissent from, and obtain
payment of the fair value of his shares in the event of any of the following
corporate actions:
(a) Consummation of a plan of merger to which the domestic
corporation is a party:
(1) If approval by the stockholders is required for the merger
by NRS 92A.120 to 92A.160, inclusive, or the articles of incorporation and he is
entitled to vote on the merger; or
(2) If the domestic corporation is a subsidiary and is merged
with its parent under NRS 92A.180.
(b) Consummation of a plan of exchange to which the domestic corporation
is a party as the corporation whose subject owner's interests will be acquired,
if he is entitled to vote on the plan.
(c) Any corporate action taken pursuant to a vote of the stockholders to
the event that the articles of incorporation, bylaws or a resolution of the
board of directors provides that voting or nonvoting stockholders are entitled
to dissent and obtain payment for their shares. A stockholder who is entitled to
dissent and obtain payment under NRS 92A.300 to 92A.500, inclusive, may not
challenge the corporate action creating his entitlement unless the action is
unlawful or fraudulent with respect to him or the domestic corporation. (Added
to NRS by 1995, 2087)
NRS 92A.390 Limitations on right of dissent: Stockholders of certain
classes or series; action of stockholders not required for plan of merger. 1.
There is no right of dissent with respect to a plan of merger or exchange in
favor of stockholders of any class or series which, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting at which the plan of merger or exchange is to be acted on, were either
listed on a national securities exchange, included in the national market system
by the National Association of Securities Dealers, Inc., or held by at least
2,000 stockholders of record, unless: (a) The articles of incorporation of the
corporation issuing
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the shares provide otherwise; or (b) The holders of the class or series are
required under the plan of merger or exchange to accept for the shares anything
except: (1) Cash, owner's interests or owner's interests and cash in lieu of
fractional owner's interests of: (i) The surviving or acquiring entity; or (ii)
Any other entity which, at the effective date of the plan of merger or exchange,
were either listed on a national securities exchange, included in the national
market system by the National Association of Securities Dealers, Inc., or held
of record by a least 2,000 holders of owner's interests of record; or (2) A
combination of cash and owner's interests of the kind described in
sub-subparagraphs (i) and (ii) of subparagraph (1) of paragraph (b). 2. There is
no right of dissent for any holders of stock of the surviving domestic
corporation if the plan of merger does not require action of the stockholders of
the surviving domestic corporation under NRS 92A.130. (Added to NRS by 1995,
2088)
NRS 92A.400 Limitations on right of dissent: Assertion as to portions
only to shares registered to stockholder; assertion by beneficial stockholder.
1. A stockholder of record may assert dissenter's rights as to fewer
than all of the shares registered in his name only if he dissents with respect
to all shares beneficially owned by any one person and notifies the subject
corporation in writing of the name and address of each person on whose behalf he
asserts dissenter's rights. The rights of a partial dissenter under this
subsection are determined as if the shares as to which he dissents and his other
shares were registered in the names of different stockholders.
2. A beneficial stockholder may assert dissenter's rights as to shares
held on his behalf only if: (a) He submits to the subject corporation the
written consent of the stockholder of record to the dissent not later than the
time the beneficial stockholder asserts dissenter's rights; and (b) He does so
with respect to all shares of which he is the beneficial stockholder or over
which he has power to direct the vote. (Added to NRS by 1995, 2089)
NRS 92A.410 Notification of stockholders regarding right of dissent.
1. If a proposed corporate action creating dissenters' rights is
submitted to a vote at a stockholders' meeting, the notice of the meeting must
state that stockholders are or may be entitled to assert dissenters' rights
under NRS 92A.300 to 92A.500, inclusive, and be accompanied by a copy of those
sections.
2. If the corporate action creating dissenters' rights is taken by
written consent of the stockholders or without a vote of the stockholders, the
domestic corporation shall notify in writing all stockholders entitled to assert
dissenters' rights that the action was taken and send them the dissenter's
notice described in NRS 92A.430. (Added to NRS by 1995, 2089; A 1997, 730)
NRS 92A.420 Prerequisites to demand for payment for shares.
1. If a proposed corporate action creating dissenters' rights is
submitted to a vote at a stockholders' meeting, a stockholder who wishes to
assert dissenter's rights: (a) Must deliver to the subject corporation, before
the vote is taken, written notice of his intent to demand payment for his shares
if the proposed action is effectuated; and (b) Must not vote his shares in favor
of the proposed action.
2. A stockholder who does not satisfy the requirements of subsection 1
is not entitled to payment for his shares under this chapter. (Added to NRS by
1995, 2089)
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NRS 92A.430 Dissenter's notice: Delivery to stockholders entitled to
assert rights; contents.
1. If a proposed corporate action creating dissenters' rights is
authorized at a stockholders' meeting, the subject corporation shall deliver a
written dissenter's notice to all stockholders who satisfied the requirements to
assert those rights.
2. The dissenter's notice must be sent no later than 10 days after the
effectuation of the corporate action, and must: (a) State where the demand for
payment must be sent and where and when certificates, if any, for shares must be
deposited; (b) Inform the holders of shares not represented by certificates to
what extent the transfer of the shares will be restricted after the demand for
payment is received; (c) Supply a form for demanding payment that includes the
date of the first announcement to the news media or to the stockholders of the
terms of the proposed action and requires that the person asserting dissenter's
rights certify whether or not he acquired beneficial ownership of the shares
before that date; (d) Set a date by which the subject corporation must receive
the demand for payment, which may not be less than 30 nor more than 60 days
after the date the notice is delivered; and (e) Be accompanied by a copy of NRS
92A.300 to 92A.500, inclusive. (Added to NRS by 1995, 2089)
NRS 92A.440 Demand for payment and deposit of certificates; retention of
rights of stockholder.
1. A stockholder to whom a dissenter's notice is sent must: (a) Demand
payment; (b) Certify whether he acquired beneficial ownership of the shares
before the date required to be set forth in the dissenter's notice for this
certification; and (c) Deposit his certificates, if any, in accordance with the
terms of the notice.
2. The stockholder who demands payment and deposits his certificates, if
any, before the proposed corporate action is taken retains all other rights of a
stockholder until those rights are canceled or modified by the taking of the
proposed corporate action.
3. The stockholder who does not demand payment or deposit his
certificates where required, each by the date set forth in the dissenter's
notice, is not entitled to payment for his shares under this chapter. (Added to
NRS by 1995, 2090; A 1997, 730)
NRS 92A.450 Uncertificated shares: Authority to restrict transfer after
demand for payment; retention of rights of stockholder.
1. The subject corporation may restrict the transfer of shares not
represented by a certificate from the date the demand for their payment is
received.
2. The person for whom dissenter's rights are asserted as to shares not
represented by a certificate retains all other rights of a stockholder until
those rights are canceled or modified by the taking of the proposed corporate
action. (Added to NRS by 1995, 2090)
NRS 92A.460 Payment for shares: General requirements.
1. Except as otherwise provided in NRS 92A.470, within 30 days after
receipt of a demand for payment, the subject corporation shall pay each
dissenter who complied with NRS 92A.440 the amount the subject corporation
estimates to be the fair value of his shares, plus accrued interest. The
obligation of the subject corporation under this
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subsection may be enforced by the district court: (a) Of the county where the
corporation's registered office is located; or (b) At the election of any
dissenter residing or having its registered office in this state, of the county
where the dissenter resides or has its registered office. The court shall
dispose of the complaint promptly.
2. The payment must be accompanied by: (a) The subject corporation's
balance sheet as of the end of a fiscal year ending not more than 16 months
before the date of payment, a statement of income for that year, a statement of
changes in the stockholders' equity for that year and the latest available
interim financial statements, if any; (b) A statement of the subject
corporation's estimate of the fair value of the shares; (c) An explanation of
how the interest was calculated; (d) A statement of the dissenter's rights to
demand payment under NRS 92A.480; and (e) A copy of NRS 92A.300 to 92A.500,
inclusive. (Added to NRS by 1995, 2090)
NRS 92A.470 Payment for shares: Shares acquired on or after date of
dissenter's notice.
1. A subject corporation may elect to withhold payment from a dissenter
unless he was the beneficial owner of the shares before the date set forth in
the dissenter's notice as the date of the first announcement to the news media
or to the stockholders of the terms of the proposed action.
2. To the extent the subject corporation elects to withhold payment,
after taking the proposed action, it shall estimate the fair value of the
shares, plus accrued interest, and shall offer to pay this amount to each
dissenter who agrees to accept it in full satisfaction of his demand. The
subject corporation shall send with its offer a statement of its estimate of the
fair value of the shares, an explanation of how the interest was calculated, and
a statement of the dissenters' right to demand payment pursuant to NRS 92A.480.
(Added to NRS by 1995, 2091)
NRS 92A.480 Dissenter's estimate of fair value: Notification of subject
corporation; demand for payment of estimate.
1. A dissenter may notify the subject corporation in writing of his own
estimate of the fair value of his shares and the amount of interest due, and
demand payment of his estimate, less any payment pursuant to NRS 92A.460, or
reject the offer pursuant to NRS 92A.470 and demand payment of the fair value of
his shares and interest due, if he believes that the amount paid pursuant to NRS
92A.460 or offered pursuant to NRS 92A.470 is less than the fair value of his
shares or that the interest due is incorrectly calculated.
2. A dissenter waives his right to demand payment pursuant to this
section unless he notifies the subject corporation of his demand in writing
within 30 days after the subject corporation made or offered payment for his
shares. (Added to NRS by 1995, 2091)
NRS 92A.490 Legal proceeding to determine fair value: Duties of subject
corporation; powers of court; rights of dissenter.
1. If a demand for payment remains unsettled, the subject corporation
shall commence a proceeding within 60 days after receiving the demand and
petition the court to determine the fair value of the shares and accrued
interest. If the subject corporation does not commence the proceeding within the
60-day period, it shall pay each dissenter whose demand remains unsettled the
amount demanded.
2. A subject corporation shall commence the proceeding in the district
court of the county where its registered office is located. If the subject
corporation is a foreign entity without a resident agent in the state, it shall
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commence the proceeding in the county where the registered office of the
domestic corporation merged with or whose shares were acquired by the foreign
entity was located.
3. The subject corporation shall make all dissenters, whether or not
residents of Nevada, whose demands remain unsettled, parties to the proceeding
as in an action against their shares. All parties must be served with a copy of
the petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
4. The jurisdiction of the court in which the proceeding is commenced
under subsection 2 is plenary and exclusive. The court may appoint one or more
persons as appraisers to receive evidence and recommend a decision on the
question of fair value. The appraisers have the powers described in the order
appointing them, or any amendment thereto. The dissenters are entitled to the
same discovery rights as parties in other civil proceedings.
5. Each dissenter who is made a party to the proceeding is entitled to a
judgment: (a) For the amount, if any, by which the court finds the fair value of
his shares, plus interest, exceeds the amount paid by the subject corporation;
or (b) For the fair value, plus accrued interest, of his after-acquired shares
for which the subject corporation elected to withhold payment pursuant to NRS
92A.470. (Added to NRS by 1995, 2091)
NRS 92A.500 Legal proceeding to determine fair value: Assessment of
costs and fees.
1. The court in a proceeding to determine fair value shall determine all
of the costs of the proceeding, including the reasonable compensation and
expenses of any appraisers appointed by the court. The court shall assess the
costs against the subject corporation, except that the court may assess costs
against all or some of the dissenters, in amounts the court finds equitable, to
the extent the court finds the dissenters acted arbitrarily, vexatiously or not
in good faith in demanding payment.
2. The court may also assess the fees and expenses of the counsel and
experts for the respective parties, in amounts the court finds equitable: (a)
Against the subject corporation and in favor of all dissenters if the court
finds the subject corporation did not substantially comply with the requirements
of NRS 92A.300 to 92A.500, inclusive; or (b) Against either the subject
corporation or a dissenter in favor of any other party, if the court finds that
the party against whom the fees and expenses are assessed acted arbitrarily,
vexatiously or not in good faith with respect to the rights provided by NRS
92A.300 to 92A.500, inclusive.
3. If the court finds that the services of counsel for any dissenter
were of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the subject corporation,
the court may award to those counsel reasonable fees to be paid out of the
amounts awarded to the dissenters who were benefitted.
4. In a proceeding commenced pursuant to NRS 92A.460, the court may
assess the costs against the subject corporation, except that the court may
assess costs against all or some of the dissenters who are parties to the
proceeding, in amounts the court finds equitable, to the extent the court finds
that such parties did not act in good faith in instituting the proceeding.
5. This section does not preclude any party in a proceeding commenced
pursuant to NRS 92A.460 or 92A.490 from applying the provisions of N.R.C.P. 68
or NRS 17.115. (Added to NRS by 1995, 2092)
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EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
99.1 NuMed Surgical, Inc. Proxy Card
NUMED SURGICAL, INC.
SPECIAL MEETING OF SHAREHOLDERS, FEBRUARY 24, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of Common Shares of NuMed Surgical, Inc., a
corporation organized under the laws of the state of Nevada, (the "Company")
does hereby appoint Jugal K. Taneja, Robert P. Ottman, and Paul A. Santostasi,
and each of them, as due and lawful attorneys-in-fact (each of whom shall have
full power of substitution), to represent and vote as designated below all of
the Common Shares of NuMed Surgical, Inc. that the undersigned held of record at
5:00 p.m., Eastern Standard Time, on January 15, 1999, at the Special Meeting of
Shareholders of NuMed Surgical, Inc. 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 Wednesday, February 24, 1999, at 9:30 a.m., local time,
or any adjournment or postponement thereof, on the following matters, and on
such other business as may properly come before the meeting:
1. APPROVE AND ADOPT REVERSE STOCK SPLIT. Proposal to reduce the
number of outstanding shares of the common stock, par value
$.001 per share, of the Company, through a one-for-fifty
reverse split of such outstanding shares;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. APPROVAL OF MERGER AGREEMENT. Proposal to adopt the Agreement
and Plan of Merger dated as of January 15, 1999 (the "Merger
Agreement") by and between Nutriceuticals.com Corporation,
Florida corporation and the Company, pursuant to which
Nutriceuticals.com Corporation will be merged with and into
the Company (the "Merger"), with the Company as the
corporation surviving the Merger, and in which (i) each issued
and outstanding common share of Nutriceuticals.com will be
converted into one (1) share of NuMed Common Stock, (ii)
NuMed's corporate name will be changed to "Nutriceuticals.com
Corporation," and (iii) the officers and directors of
Nutriceuticals.com will become the officers and directors of
NuMed after the Merger.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, on such other business as may properly
come before the meeting.
(PLEASE SIGN AND DATE ON REVERSE SIDE)
<PAGE>
(CONTINUED FROM OTHER SIDE)
PLEASE SIGN AND RETURN PROMPTLY.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE
REVERSE STOCK SPLIT, AND FOR THE ADOPTION OF THE MERGER AGREEMENT.
(PLEASE SIGN, DATE, AND RETURN THIS PROXY CARD EXACTLY AS YOUR NAME OR
NAMES APPEAR BELOW, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.)
[ ] I PLAN TO ATTEND THE SPECIAL MEETING.
[ ] I DO NOT PLAN TO ATTEND THE SPECIAL MEETING.
DATE: ____________________________, 1999
SIGNATURE(S):___________________________
________________________________________
________________________________________
TITLE OR AUTHORITY (IF APPLICABLE)
PLEASE SIGN YOUR NAME HERE EXACTLY AS IT
APPEARS HEREON. JOINT OWNERS SHOULD EACH
SIGN. WHEN SIGNING AS AN ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE,
GUARDIAN, CORPORATE OFFICER OR OTHER
SIMILAR CAPACITY, SO INDICATE. IF THE
OWNER IS A CORPORATION, AN AUTHORIZED
OFFICER SHOULD SIGN FOR THE CORPORATION
AND STATE HIS TITLE. THIS PROXY SHALL BE
DEEMED VALID FOR ALL SHARES HELD IN ALL
CAPACITIES THAT THEY ARE HELD BY THE
SIGNATORY.
