UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 1, 2005
BIO-SOLUTIONS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Nevada 33-25126-D 85-0368333
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification Number)
1281 SW 28th Avenue, Boynton Beach, FL, 33426
(Address of principal executive offices) (zip code)
(561) 436-7064
(Registrant's telephone number, including area code)
Copies to:
Richard A. Friedman, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, New York 10018
Phone: (212) 930-9700
Fax: (212) 930-9725
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On November 1, 2005, Bio-Solutions International, Inc. ("Bio-Solutions" or
the "Company") entered into an Agreement and Plan of Merger (the "Agreement")
with OmniMed Acquisition Corp., (the "Acquirer), a Nevada corporation and a
wholly owned subsidiary of the Company, OmniMed International, Inc., a Nevada
corporation ("OmniMed"), and the shareholders of OmniMed (the "OmniMed
Shareholders"). Pursuant to the Agreement, the Company acquired all of the
outstanding equity stock of OmniMed from the OmniMed Shareholders. As
consideration for the acquisition of OmniMed, the Company agreed to issue
9,894,900 shares of the Company's common stock to the OmniMed Shareholders.
These issuances are deemed to be exempt under rule 506 of Regulation D and
Section 4(2) of the Securities Act of 1933, as amended since, among other
things, the transaction did not involve a public offering, the investors were
accredited investors and/or qualified institutional buyers, the investors had
access to information about the company and their investment, the investors took
the securities for investment and not resale, and the Company took appropriate
measures to restrict the transfer of the securities.
Item 2.01 Completion of Acquisition or Disposition of Assets
DESCRIPTION OF BIO-SOLUTIONS' BUSINESS
Organizational History
Bio-Solutions International, Inc. was originally incorporated under the name
Septima Enterprises, Inc. ("Septima") on September 12, 1988 under the laws of
the State of Colorado for the purpose of acquiring interests in other business
entities and commercial technologies. Due to the unsuccessful nature of its
initial operations, Septima ceased all operations in February 1998. In September
1998, creditors of Septima were successful in obtaining a judgment against
Septima for unpaid debts. In October 1998, Septima was subject to a Judicial
Sale whereby all assets of Septima were sold in satisfaction of the September
1998 judgment. Accordingly, the aggregate adjusted balance of open trade
payables, as of December 31, 2000, of approximately $134,000 was the only
remaining identifiable liability of Septima.
During the first quarter of Fiscal 2001, Septima's legal counsel began to
negotiate the settlement of the outstanding trade accounts payable. As a result
of these efforts, Septima was able to negotiate settlements during the second
quarter of Fiscal 2001, using cash, Septima's restricted and unregistered common
stock and combinations thereof, to satisfy approximately $122,700 of open trade
payables Additionally, unaffiliated third parties have agreed to assume the
remaining approximately $11,000 of trade payables owed to unlocated vendors.
On January 22, 2001, Septima held a Special Meeting of the Shareholders at which
the following items were approved: 1) a 1 for 100 reverse split of the Company's
issued and outstanding common stock as of February 5, 2001; 2) the
reincorporation to the State of Nevada thereby changing the corporate domicile
from Colorado to Nevada; and 3) a change the par value of the common shares from
no par value to $0.0001 per share.
Following the Special Meeting of the Shareholders, Septima changed its state of
incorporation from Colorado to Nevada by means of a merger with and into a
Nevada corporation formed on January 26, 2001 solely for the purpose of
effecting the reincorporation. The Certificate of Incorporation and Bylaws of
the Nevada corporation are the Certificate of Incorporation and Bylaws of the
surviving corporation. Such Certificate of Incorporation changed Septima's name
to Bio-Solutions International, Inc. and modified Septima's capital structure to
allow for the issuance of 100,000,000 total equity shares consisting of no
shares of preferred stock and 100,000,000 shares of common stock, with a par
value of $0.0001 per share. Overview of Business
Bio-Solutions has sold and spun-off its two operating subsidiaries and currently
has no operations.
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Sale of Manufacturing Division
In March 2004, the Company sold certain of its assets associated with the
manufacturing portion of its business to Bio Solutions Manufacturing, Inc., a
Nevada corporation ("BSMI"). As a part of such agreement, BSMI agreed to assume
certain liabilities totaling $309,709.60 to be paid within six (6) months of
closing, with no less than $25,000 being paid each month until all the
liabilities are satisfied. BSMI issued 2,000,000 shares of the restricted common
stock of Single Source Financial Services, Inc., paid the Company $250,000.00
cash and agreed to make payments in the amount of $25,000.00 per month for a
period of four (4) months as payment for the assets.
Also in March 2004, BSMI entered into a marketing/manufacturing agreement with
Bio-Solutions Franchise Corp. ("BSFC"). As a part of the agreement, BSMI will
manufacture, test, research and develop environmental products for BSFC to
market and sell. The term of the agreement is for a period of ten (10) years.
The Company recorded a gain on disposed of operations in the amount of $330,375,
net of income tax effects.
Spin Off of Franchise Division
Effective as of June 30, 2004, Bio-Solutions International, Inc. has spun-out
its formerly wholly-owned subsidiary, Bio-Solutions Franchise Corp.
("Franchise"), to all of its stockholders of record as of July 20, 2004. The
spin-out was effectuated through a pro-rata distribution of 100% of the capital
stock of Franchise to the existing stockholders of the Company. The shares of
Franchise that were distributed are "restricted" securities and cannot be resold
without registration under the Securities Act of 1933, as amended, unless an
exemption from registration is available. Neither Franchise nor any class of its
capital stock is registered under the Securities Exchange Act of 1934, as
amended. There is no public market for the shares of capital stock of Franchise,
nor is there expected to be one in the foreseeable future.
The Company recorded a loss on disposed of operations in the amount of $324,690,
net of income tax effects.
On July 20, 2004, the Company filed a Schedule 14C approving by shareholder
consent a reverse split of the common stock of 1 for 500, the increase of
authorized preferred stock and approved a restatement of the authorized shares
after the reverse split of 110,000,000, of which 10,000,000 is preferred and
100,000,000 is common, and approved the spinout of BSFC to existing
shareholders, all of which actions have been taken. As a condition of new
funding and to better position the Company for a merger or acquisition, a
majority of shareholders consented to and the Board of Directors has approved an
additional 1 for 10 reverse split of all outstanding shares, the timing of such
reverse to be in the discretion of the Board of Directors but to occur on or
before June 30, 2005.
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DESCRIPTION OF OMNIMED'S BUSINESS
Organizational History
OmniMed was incorporated in the State of Nevada under the name Mednet
International, Inc. on July 16, 1997. On October 17, 2003, Mednet International
changed its name to OmniMed International, Inc.
Overview of Business
OmniMed is developing a system for gathering, digitizing, storing and
distributing information for the healthcare field.
OmniMed's goal is to revolutionize the medical industry by bringing digital
technology to the business of medicine. OmniMed intends to accomplish its
objective by providing individuals with a simple and secure way to access their
lifetime of actual medical records in an efficient and cost-effective manner.
OmniMed's products and services are designed to provide Healthcare providers
with the ability to reference their patient's actual past medical records,
thereby ensuring the most accurate treatment and services possible while
simultaneously reducing redundant procedures.
OmniMed is creating a system for gathering and digitizing medical records so
that individuals can have a comprehensive record of all of their medical visits.
OmniMed's primary product is the MedeFile system, a highly secure system for
gathering and maintaining medical records. The MedeFile system is designed to
gather all of its members' medical records and create a single, comprehensive
medical record that is accessible 24 hours a day, seven days a week.
Industry Overview
Since the beginning of modern medicine, information about a patient's history,
testing, treatment and care have been key ingredients in the provision of
quality healthcare. Medical record information takes many forms, such as the
patient's diagnosis, treatments, surgeries, medications, allergies, x-rays, and
test results. The usage of medical record information has dramatically increased
over the past 2 decades due to factors such as the complex reimbursement
structure in the United States healthcare system, an ever more litigious
society, and increased patient awareness.
Every patient visit generates a medical record. Today this information is
typically contained in a paper-based patient medical record. A patient's medical
records are usually stored in physicians' offices as well as other healthcare
facilities the patient has visited. A record that tracks a patient's medical
treatment over time is called a "longitudinal record".
In today's healthcare environment, access to hospital-based medical records by
patients and other authorized parties (e.g., insurance companies, attorneys,
etc.) is controlled by Release of Information (ROI) policies and procedures. ROI
processes are based on the premise that patients have a right to access their
medical records and that they must specifically designate any other party to
whom their medical information can be released. ROI policies and procedures are
based on the following laws and policies: the federal Health Insurance
Portability and Accountability Act (HIPPA), various state laws, and the policies
and professional practice guidelines set forth by the American Health
Information Management Association (AHIMA).
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Congress passed the Health Insurance Portability & Accountability Act (HIPAA) in
1996. The purpose of HIPAA is to prevent fraud in the health care industry and
to protect confidential patient information. HIPPA standardizes and provides
enforcement mechanisms for ROI rules and guidelines to protect personal
healthcare information. HIPAA effects entities involved with electronic health
care information--including health care providers, health plans, employers,
public health authorities, life insurers, clearinghouses, billing agencies,
information systems vendors, service organizations, universities, and even
single-physician offices. The final version of the HIPAA Privacy regulations was
issued in December 2000, and went into effect on April 14, 2001. A two-year
"grace" period was included; enforcement of the HIPAA Privacy Rules began on
April 14, 2003.
Overview of Products and Services
MedeFile
MedeFile is a Business to Business and a Business to Consumer subscription
service. MedeFile is designed to create a "cradle to grave" longitudinal record
for each of its members by retrieving and consolidating copies of their medical
records. When the records are received, the MedeFile system consolidates them
into a single medically correct format. The records are then stored in OmniMed's
MedeVault, a secure repository that can be accessed by MedeFile members 24 hours
a day, 7 days a week. Because of the unique security procedures incorporated
into the MedeFile system through Securo Med, the member is the only person able
to access or give permission to access their records.
A complete MedeFile file is comprised of copies of the member's actual medical
records as well as a Digital Health Profile (DHP), which is an overview of the
patient's and his family's medical history. In addition, every MedeFile member
receives a MedeDrive, an external USB drive which stores all of a patient's
Emergency Medical Information as well as a copy of the member's MedeFile.
MedeFile's Emergency Medical Information (EMI) Card
Upon becoming a MedeFile member each individual will receive a Membership /
Emergency Medical Information (EMI) Card which contains instructions on how to
contact MedeFile in order to retrieve the member's medical records.
The Digital Health Profile (DHP)
A part of a member's MedeFile is their Digital Health Profile (DHP). This form
is completed by the patient in order to provide a summary of the patient's
healthcare history which assists healthcare providers in understanding the
patient's course of medical treatment. This document, along with Advanced
Directives and medical record copies, complete the documents contained in the
patient's MedeFile.
MedeDrive
The MedeDrive is an external USB drive which stores all of a patient's Emergency
Medical Information and their MedeFile which can be viewed on a personal
computer. MedeDrive self loads its own viewer, so no special program or software
is required. The MedeDrive easily plugs into any PC USB port on most
Windows-based computers built in the last four years. (Macintosh version is
currently unavailable). The MedeDrive USB key can be updated easily and as
frequently as the member desires at no additional cost.
MedeVault
The MedeVault is designed to serve as an electronic data and document repository
that incorporates state-of-the-art security features in order to prevent
unauthorized access to a patient's records. Access to the MedeVault is provided
through an encrypted connection to a web service run by OmniMed. This connection
is provided by Secure Sockets Layer (SSL) technology.
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OmniMed Clinical Information Systems (CIS)
OmniMed CIS is a Business-to-Business professional consulting service that is
designed to generate revenue from two primary sources: consulting engagements
and product commissions.
OmniMed CIS intends to offer a full range of HIPPA assessment and compliance
services. OmniMed CIS' goal is to facilitate the transition to HIPAA compliance.
In addition, OmniMed CIS intends to offer services that will enable medical
facilities to transition from paper-based medical records to electronic medical
records. OmniMed CIS plans to digitize medical facility offices and offer
software to keep the records up-to-date, index the records, and make them
queryable based on each facility's specific needs.
OmniMed consulting engagements are generally fixed-price and fixed scope
projects that also generate occasional time-and-materials income from ongoing
support and training activities related to its services. In addition, OmniMed
CIS intends to resell technology from various vendors as needed and may incur
commission revenue and revenue from the markup of these products.
OmniMed CIS will offer several services, including the evaluation of the record
keeping, security, and back office practices. After evaluation is complete,
OmniMed CIS staff will move forward to implement their own remediation plans for
the client. One aspect of these plans may include OmniScan, a component of CIS,
which would produce additional revenue by scanning existing paper-based medical
records and converting them to a secure, more efficient digital format.
Furthermore, other revenue streams may be created based on the licensing of the
OmniViewer for the digitized records as well as the scanning software for those
facilities wishing to implement a "go-forward" scanning system. Finally, the
clients may be charged a contractual support fee for ongoing technical support
and updates, which may be assessed on an annual basis.
OmniScan
OmniMed's OmniScan service is designed to enable medical facilities to convert
their paper based medical records into a digital format. OmniMed CIS intends to
license the software which allows for electronic records to be viewed at various
facility locations. In addition, the OmniScan service is designed to provide the
following advantages: high quality images, high-speed conversion, record keeping
in a single location, simultaneous use of files, and simplified release of
information.
SecurMed
Securo Med is designed to serve as an authentication process that protects
against any information being viewed by unauthorized persons.
Members
As of September 30, 2005, MedeFile had approximately 40 members.
Sales and Marketing
OmniMed intends to employ the following marketing strategies in order to
generate awareness of OmniMed's products and services: direct sales, direct
mail, a public relations campaign, speaking engagements by OmniMed's executive
officers, participation in trade shows, and alliances and partnerships with
third parties.
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OmniMed's marketing strategy will target the following types of organizations:
Health Maintenance Organizations, Preferred Provider Organizations, managed care
organizations, insurance companies, large groups of individuals such as AARP,
large and medium sized corporations, nursing homes, and internet users.
In particular, the MedeFile service is designed to be sold in several distinct
ways:
o MedeFile Website - through normal e-commerce mechanisms, patients may
enroll in the service directly from the MedeFile website. Membership
may be purchased on an annual basis and may be paid all at once, or
over time at the patient's discretion.
o Physician Referrals - Patients may enroll based on a doctor's
referral. In the event that these physicians are also OmniMed CIS
customers, they may easily transfer their patients' information into
the MedeFile system.
o Large group offerings (e.g., AARP, trade unions) - Large,
membership-driven organizations may offer the MedeFile system to their
members at a discounted rate, which may be negotiated with OmniMed
based on the size of the expected enrollment. An additional
promotional advantage may be derived from the use of MedeFile through
the website of the client organization. Hence, MedeFile functionality
may be accessed using each organization's site.
o Insurance companies - Similar to large group offerings identified
above, insurance companies will be able to offer the MedeFile service
to their insured as a means to decrease the cost of medical care.
Technology
OmniMed will use and continue to update the most advanced security measures
available. Data transmitted between Web browsers and Web servers over the
Internet using TCP/IP is generally susceptible to unauthorized interception. To
protect sensitive data, the most common method of protection is data encryption.
MedeFile will use the industry standard Secure Sockets Layer (SSL), which is a
mechanism to secure Internet traffic so that it cannot be intercepted. SSL
utilizes digital certificates to verify the identity and integrity of a web site
(such as MedeFile) and to protect the security of transactions by certifying
their source and destination.
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Competition
There are other companies working in the medical information technology arena
such as GE Healthcare, Bio-Imaging Technologies, and Cyber Records. Some
competing companies offer a USB key for medical record storage but require the
customer to provide or "self-populate" the information to be stored. The
information in a self-populated record is limited and is only as accurate as the
individual's memory and understanding of their health condition. Other companies
expect each customer to obtain their own medical records from their various
healthcare providers. Some offer a CD-Rom for record storage. Usually, the
CD-Rom cannot be updated with any changes to an individual's medical status or
treatment. Therefore, a new CD-Rom needs to be obtained from that company in
order for the individual to have the most current, accurate information
regarding their health. There are companies that are solely web-based that do
not provide the customer the capability to have a copy of their records. In this
case, an internet connection is required to view stored documents. In addition,
there are companies that do not concentrate on digitizing an individual's
medical records but on converting medical facilities' records from paper to
electronic format.
The advantage to being a MedeFile member is that MedeFile gathers, consolidates,
organizes and securely stores each member's actual medical records on their
behalf. The MedeFile membership includes a Digital Health Profile (DHP) which
contains the member's general health history, emergency contacts, doctor
contacts, family medical history, allergies, medications, and current
conditions. A MedeFile membership also includes a MedeDrive which easily plugs
into any PC USB port on most Windows-based computers built in the last four
years. (Macintosh version is currently unavailable). The MedeDrive contains the
member's emergency medical information which can be easily accessed by emergency
care personnel, and the client's actual medical records which are stored in a
secure area of the subscriber's MedeFile. The MedeDrive USB key can be updated
easily and as frequently as the member desires at no additional cost.
Employees
As of October, 2005 OmniMed had a total of five employees, including four full
time and one part time employees.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FORWARD LOOKING STATEMENTS
Some of the statements contained in this Form 8-K that are not historical facts
are "forward-looking statements" which can be identified by the use of
terminology such as "estimates," "projects," "plans," "believes," "expects,"
"anticipates," "intends," or the negative or other variations, or by discussions
of strategy that involve risks and uncertainties. We urge you to be cautious of
the forward-looking statements, that such statements, which are contained in
this Form 8-K, reflect our current beliefs with respect to future events and
involve known and unknown risks, uncertainties and other factors affecting our
operations, market growth, services, products and licenses. No assurances can be
given regarding the achievement of future results, as actual results may differ
materially as a result of the risks we face, and actual events may differ from
the assumptions underlying the statements that have been made regarding
anticipated events. Factors that may cause actual results, our performance or
achievements, or industry results, to differ materially from those contemplated
by such forward-looking statements include without limitation:
1. Our ability to attract and retain management, and to integrate and maintain
technical information and management information systems;
2. Our ability to generate customer demand for our services;
3. The intensity of competition; and
4. General economic conditions.
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All written and oral forward-looking statements made in connection with this
Form 8-K that are attributable to us or persons acting on our behalf are
expressly qualified in their entirety by these cautionary statements. Given the
uncertainties that surround such statements, you are cautioned not to place
undue reliance on such forward-looking statements.
OmniMed Results of Operations
OmniMed Results of Operations for the Six Months ended June 30, 2005 compared to
the Six Months ended June 30, 2004.
Revenues
The Company is a development stage company and has not generated any revenues
during the period from inception to June 30, 2005.
Depreciation Expenses
Depreciation is provided by the straight-line method over the estimated useful
life of the related assets utilizing a half-year convention in the year
acquired. Depreciation expenses were $12,397 for the six month period ended June
30, 2005 as compared to $7,856 for the period ended June 30, 2004. Our property
and equipment consist of: Computer equipment valued at $136,933 at June 30, 2005
as compared to $84,287 at June 30, 2004; office furniture valued at $12,928 at
June 30, 2005 as compared to $11,230 at June 30, 2004 and; office equipment
valued at $2,529 at June 30, 2005, as compared to zero at June 30, 2004. In
total, our property and equipment as of June 30, 2005 was valued at $154,880, as
compared to $95,517 at June 30, 2004.
Total Expenses
Total expenses for the period ended June 30, 2005 were $263,678, as compared to
$159,517 for the period ended June 30, 2004. This increase is due primarily to
contracted marketing services and professional fees.
Net Income (Loss)
Net loss for the six month period ended June 30, 2005 was $(263,431), as
compared to a net loss of $(146,416) for the six month period ended June 30,
2004. This increase resulted primarily from increases in operating expenses as
noted above.
Interest Expense and Interest Income
Interest expense for the six month period ended June 30, 2005 was $2,189, as
compared to interest expense of $0 for the six month period ended June 30, 2004.
This change resulted primarily from advances from stockholder being treated as
an interest bearing loan.
Liquidity and Capital Resources
As of June 30, 2005 we had cash and cash equivalents of $82,577, as compared to
$53,483 as of June 30, 2004. Our current liabilities as of June 30, 2005
aggregated $21,223, compared to $4,507 as of June 30, 2004. Additionally, we had
a shareholder's deficiency in the amount of $56,708 at June 30, 2005 as compared
to $366,993 at June 30, 2004. The change in shareholders equity is the result of
net losses for the period.
Off Balance Sheet Arrangements
We do not have any off balance sheet arrangements as of June 30, 2005 or as of
the date of this report.
OmniMed Results of Operations for the Year ended December 31, 2004 compared to
year ended December 31, 2003.
Revenues
OmniMed is a development stage company and has not generated any revenues during
the period from inception to December 31, 2004.
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Depreciation Expenses
Depreciation is provided by the straight-line method over the estimated useful
life of the related assets utilizing a half-year convention in the year
acquired. Depreciation expenses were $18,405 for the year ended December 31,
2004 as compared to $16,577 for the year ended December 31, 2003.
Our property and equipment consist of: Computer equipment valued at $107,487 at
December 31, 2004 as compared to $4,287 at December 31, 2003; office furniture
valued at $12,928 at December 31, 2004 as compared to $9,301 at December 31,
2003 and; office equipment valued at $2,529 at December 31, 2004, as compared to
zero at December 31, 2003. In total, our property and equipment as of December
31, 2004 was valued at $122,944, as compared to $93,588 at December 31, 2003..
Total Expenses
Total expenses for the year ended December 31, 2004 increased to $320,719 from
$163,310 for the year ended December 31, 2003. This increase in total expenses
is due to increases in executive compensation, technology development costs,
depreciation and amortization of fixed and intangible assets and increases in
telephone and internet costs.
Net Income (Loss)
Net loss for the year ended December 31, 2004 was $400,310, as compared to a net
loss of $163,310 for the year ended December 31, 2003. This increase resulted
primarily from increases in operating expenses and loss on sale of securities.
Liquidity and Capital Resources
As of December 31, 2004 we had cash of $5,971, as compared with cash of $2,719
as of December 31, 2003. Our current liabilities as of December 31, 2004
aggregated $6,213, as compared with $2,500 as of December 31, 2003.
Additionally, we had shareholder's equity in the amount of $200,431 at December
31, 2004 as compared to $489,355 at December 31, 2003. The decrease in
shareholders equity is the result of losses incurred for the period.
Off Balance Sheet Arrangements
We do not have any off balance sheet arrangements as of December 31, 2004 or as
of the date of this report.
Critical Accounting Policies
Our discussion and analysis of our financial condition and results of
operations, including the discussion on liquidity and capital resources, are
based upon our financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States. The preparation
of these financial statements requires us to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses, and
related disclosure of contingent assets and liabilities. On an ongoing basis,
management re-evaluates its estimates and judgments, particularly those related
to the determination of the estimated recoverable amounts of trade accounts
receivable, impairment of long-lived assets, revenue recognition and deferred
tax assets.
Income taxes are accounted for under the asset and liability method. Under this
method, to the extent that we believe that the deferred tax asset is not likely
to be recovered, a valuation allowance is provided. In making this
determination, we consider estimated future taxable income and taxable timing
differences expected to reverse in the future. Actual results may differ from
those estimates.
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Recently Issued Accounting Pronouncements
In December 2004 the FASB issued revised SFAS No. 123R, "Share-Based Payment".
SFAS No. 123R sets accounting requirements for "share-based" compensation to
employees and requires companies to recognize in the income statement the
grant-date fair value of stock options and other equity-based compensation. SFAS
No. 123R is effective in interim or annual periods beginning after June 15,
2005. The Company will be required to adopt SFAS No. 123R in its third quarter
of fiscal 2005 and currently discloses the effect on net (loss) income and
(loss) earnings per share of the fair value recognition provisions of SFAS No.
123, "Accounting for Stock-Based Compensation". The Company is currently
evaluating the impact of the adoption of SFAS 123R on its financial position and
results of operations, including the valuation methods and support for the
assumptions that underlie the valuation of the awards.
Bio-Solutions Results of Operations
Bio-Solutions Results of Operations For Year ended June 30, 2005 compared to
year ended June 30, 2004
Revenues
The accounting for the year are as for a company divesting itself of its
operations, as such, the Company recorded no revenues for the years presented.
Operating Expenses
Selling, general and administrative expenses for the year ended June 30, 2005
were $22,000 versus $29,697 for the year ended June 30, 2004. These expenses are
those allocated to the parent company and include such items as the audit,
transfer agent fees, and management expenses of the sole officer/employee. Net
loss was $62,500 and $130,400, respectively. The primary reason for the decrease
was the lack of activity.
Assets and Liabilities
Assets were $45,000 at June 30, 2005, and $0 at June 30, 2004. At June 30, 2005,
assets consisted of cash. Liabilities were $603,600 and $567,900 at June 30,
2005 and 2004, respectively. At June 30, 2005 and 2004 liabilities consisted
primarily of notes payable and accrued interest.
Stockholders' Deficit
Stockholders' deficit was $558,600 at June 30, 2005 and $567,900 at June 30,
2004.
Financial Condition, Liquidity and Capital Resources
At June 30, 2005 and 2004 the Company had cash and cash equivalents of $45,000
and $0. Beginning July 1, 2004, the Company is in the process of building and
establishing a new business plan. As of July 1, 2004, the Company has no
operations, products, services or business plan.
We are uncertain if our Company and/or our former management have any exposure
with respect of Potential Violations of Federal Securities Laws in Connection
with a spin-off of Shares of its former Subsidiary's Common Stock.
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BSII declared a dividend to its stockholders of record on June 30, 2004, such
dividend comprised all of its shares of BSFC. BSII's Board of Directors declared
that 100% of the BSFC shares be issued pro-rata to BSII's common stockholders as
of the record date. At the time of the spin-off BSII sent an information
statement to its shareholders describing the spin-off. Although former
management determined that in connection with the distribution to its
shareholders registration of the shares under the Exchange Act was not necessary
at the time of the spin-off because no trading market existed or was intended to
be created, there are no assurances that we may not have exposure with respect
to these matters which exposure could conceivably include fines, sanctions
and/or penalties.
DESCRIPTION OF PROPERTY
OmniMed leases its main office which is located at 2 Ridgedale Avenue, Ste. 217,
Cedar Knolls, NJ, 07927. The lease, which commenced in expires in October 2008,
provides for additional rent for increases in operating expenses. Projected
minimum annual rent payments under the lease are as follows:
----------- -------------
2006 $18,673
----------- -------------
2007 19,912
----------- -------------
2008 21,149
----------- -------------
2009 7,222
----------- -------------
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of November 1, 2005 with
respect to the beneficial ownership of the Company's outstanding common stock
following the acquisition of OmniMed by (i) any holder of more than five (5%)
percent; (ii) each of the named executive officers, directors and director
nominees; and (iii) our directors, director nominees and named executive
officers as a group. Except as otherwise indicated, each of the stockholders
listed below has sole voting and investment power over the shares beneficially
owned.
Common Stock Percentage of
Name of Beneficial Owner (1) Beneficially Owned (2) Common Stock (2)
-------------------------------- ---------------------- ------------------
Vantage Holding Ltd.(3) 6,221,250 52.2%
Milton Hauser 3,000,000 25.2%
Eric Rosenfeld 100,000 *
David Dorrance 13,000 *
-------------------------------- ---------------------- ------------------
All officers and directors as
a group (3 persons) 3,113,000 26.1%
* Less than 1%
(1) Except as otherwise indicated, the address of each beneficial owner is c/o
OmniMed International, Inc., 2 Ridgedale Avenue, Ste. 217, Cedar Knolls, NJ,
07927.
(2) Applicable percentage ownership is based on 11,915,594 shares of common
stock outstanding as of November 1, 2005, together with securities exercisable
or convertible into shares of common stock within 60 days of October24, 2005 for
each stockholder. Beneficial ownership is determined in accordance with the
rules of the Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Shares of common stock that are
currently exercisable or exercisable within 60 days of November 1, 2005 are
deemed to be beneficially owned by the person holding such securities for the
purpose of computing the percentage of ownership of such person, but are not
treated as outstanding for the purpose of computing the percentage ownership of
any other person.
(3) Lyle Hauser is the owner of The Vantage Group Ltd. and Vantage Holding Ltd.
Lyle Hauser is the son of Milton Hauser.
12
DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Executive Officers and Directors
Below are the names and certain information regarding the Company's executive
officers, directors and director nominees following the acquisition of OmniMed.
- ----------------------- ------- ------------------------------------------------
Name Age Position
- ----------------------- ------- ------------------------------------------------
Milton Hauser 62 President, Chief Executive Officer, Director
- ----------------------- ------- ------------------------------------------------
Eric Rosenfeld 40 Chief Technical Officer
- ----------------------- ------- ------------------------------------------------
David Dorrance 42 Vice President, Digital Imaging
- ----------------------- ------- ------------------------------------------------
Officers are elected annually by the Board of Directors (subject to the terms of
any employment agreement), at our annual meeting, to hold such office until an
officer's successor has been duly appointed and qualified, unless an officer
sooner dies, resigns or is removed by the Board.
Background of Executive Officers and Directors
Milton Hauser, President and Chief Operating Officer. Mr. Hauser has been
President and Chief Operating Officer for OmniMed International since 2001.
Prior to his joining OmniMed International, his career was in the Marketing and
Advertising field and included creating marketing campaigns and programs for
such companies as Panasonic, Sanyo, Avon, Lederle International, and other
Fortune 500 companies.
Eric Rosenfeld, Chief Technical Officer. Mr. Rosenfeld has been Chief Technical
Officer since 2002. He designs and develops the technology utilized by all the
divisions of the company. Before working for OmniMed, Mr. Rosenfeld owned and
operated a successful consulting company that was engaged in various healthcare
and pharmaceutical projects for Fortune 500 companies. Prior to that, he was a
senior member of Oracle Corporation and helped establish its NY Metro consulting
practice. He was a contributing author of Oracle's development tools and
consulting methodologies, including its Designer and CDM products. Throughout
his career, Mr. Rosenfeld has played a key role in the development and
architecture of Oracle Corporation's Clinical and Pharmaceutical products and
has authored clinical data management computer systems for Merck, Parke-Davis,
Schering-Plough, and Johnson & Johnson/PRD. Mr. Rosenfeld was also a senior
member of Sybase Inc.
David Dorrance, Vice President, Digital Imaging. Mr. Dorrance has been Vice
President, Digital Imaging since February 2005.. Mr. Dorrance is a 20-year
veteran of the health care industry including five years of clinical experience
with McGill University Hospital. From January 2004 until 2005 Mr. Dorrance was
Director of New Business Development for Salumatics. From 1998 until 2004 Mr.
Dorrance was Sales Director for Lason Corporation. He has extensive knowledge of
clinical information systems, patient information management software and
hardware, patient monitoring systems and digital patient record systems. Mr.
Dorrance successfully implemented a paperless system for a Canadian hospital
(the first of its kind) by combining the conversion of all historical paper
patient records and implementation of an electronic patient record system across
all patient visit types.
Employment Agreements
OmniMed has employment agreements with five key employees that provide for total
aggregate minimum annual salaries of $264,000. Several of the employees did not
receive the minimum salary as provided for in their agreements and have waived
their right to receive unpaid salary.
13
In February, 2004, OmniMed entered into an employment agreement with Milton
Hauser. The agreement provides for Mr. Hauser to receive an annual salary of
$120,000.
In October, 2004, OmniMed entered into an employment agreement with Eric
Rosenfeld. The agreement provides for Mr. Rosenfeld to receive an annual salary
of $60,000. The agreement also provides for Mr. Rosenfeld to receive 200,000
shares of OmniMed common stock upon execution of the agreement and an additional
200,000 shares upon completion of the one-year term of employment.
In February 2005, OmniMed entered into an employment agreement with David
Dorrance. The agreement provides for Mr. Dorrance to receive 40,000 shares of
OmniMed common stock upon execution of the agreement and an additional 60,000
shares vesting 2,500 shares per month for twenty-four months. The agreement also
provides options to purchase an additional 50,000 shares of OmniMed common
stock.
Stock Option Plan
During the year 1999, OmniMed created the 1999 Stock Option Plan to attract and
retain the best qualified personnel. Under the plan, OmniMed reserved 3,300,000
shares of its common stock to be given to employees and independent contractors
as additional compensation as determined by the Board of Directors. The options
under the plan are intended to qualify as Incentive Stock Options under section
422 of the Internal Revenue Code. As of June 30, 2005, OmniMed has granted
options to four of its employees purchase 200,000 shares of OmniMed common
stock.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the total compensation
that the Company has paid or that has accrued on behalf of the Company's chief
executive officer and other executive officers with annual compensation
exceeding $100,000 during the years ended June 30, 2005, 2004 and 2003.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
-------------------------------------------
Annual Compensation Awards Payouts
------------------------------------- ------------------------------ ------------
Other Securities All
Annual Restricted Underlying Other
Name and Compen- Stock Award(s) Options/ LTIP Compen-
Principal Position Year Salary ($) Bonus ($) sation ($) ($) SARs (#) Payouts ($) sation ($)
- ------------------------- ----------- ------------- ---------- ------------ ----------------- ------------ ------------ -----------
Michael E. Bobrick 2005 0 -0- -0- -0- -0- -0- -0-
President, CEO 2004 0 -0- -0- -0- -0- -0- -0-
and Director (2) 2003 0 -0- -0- -0- -0- -0- -0-
Louis H. Elwell, III 2005 0 -0- -0- -0- -0- -0- -0-
President, CEO 2004 6,000 -0- -0- -0- -0- -0- -0-
and Director (1) 2003 60,000 -0- -0- 5,000 -0- -0- -0-
(1) 100% of the annual compensation salary for Louis H. Elwell, III was accrued
rather than paid for the years ended June 30, 2004, 2003 and 2002.
(2) Michael E. Bobrick shall resign from his positions as President, CEO, and
Director upon completion of the Agreement and Plan of Merger with OmniMed.
14
The following table sets forth information concerning the total compensation
that OmniMed has paid or that has accrued on behalf of OmniMed's chief executive
officer and other executive officers with annual compensation exceeding $100,000
during the years ended December 31, 2004, 2003 and 2002.
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
-------------------------------------------
Annual Compensation Awards Payouts
------------------------------------- ------------------------------ ------------
Other Securities All
Annual Restricted Underlying Other
Name and Compen- Stock Award(s) Options/ LTIP Compen-
Principal Position Year Salary ($) Bonus ($) sation ($) ($) SARs (#) Payouts ($) sation ($)
- ------------------------- ----------- ------------- ---------- ------------ ----------------- ------------ ------------ -----------
Milton Hauser 2004 120,000 -0- -0- -0- -0- -0- -0-
President, CEO 2003 120,000 -0- -0- -0- -0- -0- -0-
And Director 2002 120,000 -0- -0- -0- -0- -0- -0-
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
OmniMed has been able to continue operations due to the payment of company
obligations by The Vantage Group Ltd., a company owned and controlled by Lyle
Hauser. Lyle Hauser is the control person of Vantage Holding Ltd., the majority
stockholder of the Company.
During the period July 16, 1997 (inception) to June 30, 2005, The Vantage Group
Ltd., has paid OmniMed obligations in the amount of $905,318 in addition to
contributing assets of $275,000 to capital and loans of $260,000.
As of June 30, 2005, OmniMed was indebted to The Vantage Group Ltd. in the
amount of $323,528, including accrued interest of $2,189. The loan bears
interest at the rate of seven percent per annum and has no fixed maturity date.
DESCRIPTION OF SECURITIES
Bio-Solutions' authorized capital stock consists of 100,000,000 shares of common
stock at a par value of $0.0001 per share and zero shares of preferred stock. As
of June 30, 2005, there were 520,694 shares of voting stock of the Company
issued and outstanding.
Holders of the Company's common stock are entitled to one vote for each share on
all matters submitted to a stockholder vote. Holders of common stock do not have
cumulative voting rights. Therefore, holders of a majority of the shares of
common stock voting for the election of directors can elect all of the
directors. Holders of the Company's common stock representing a majority of the
voting power of the Company's capital stock issued, outstanding and entitled to
vote, represented in person or by proxy, are necessary to constitute a quorum at
any meeting of stockholders. A vote by the holders of a majority of the
Company's outstanding shares is required to effectuate certain fundamental
corporate changes such as liquidation, merger or an amendment to the Company's
articles of incorporation.
Holders of the Company's common stock are entitled to share in all dividends
that the board of directors, in its discretion, declares from legally available
funds. In the event of a liquidation, dissolution or winding up, each
outstanding share entitles its holder to participate pro rata in all assets that
remain after payment of liabilities and after providing for each class of stock,
if any, having preference over the common stock. The Company's common stock has
no pre-emptive rights, no conversion rights and there are no redemption
provisions applicable to the Company's common stock..
15
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market for Securities
Shares of Bio-Solutions' common stock are quoted on the Over the Counter
Bulletin Board ("OTCBB") under the symbol BSOU.
The high and low and close for each of the last four quarters was:
High Low Close
-----------------------------------
Quarter ended 09/30/04 $50.00 $50.00 $50.00
Quarter ended 12/31/04 $35.00 $35.00 $35.00
Quarter ended 03/31/05 $12.00 $12.00 $12.00
Quarter ended 06/30/05 $ 8.50 $ 8.50 $ 8.50
(The quarterly prices are adjusted to reflect the August 2004 1 for 500 and the
May 2005, 1 for 10 reverse splits).
The shares quoted are subject to the provisions of Section 15(g) and Rule 15g-9
of the Securities Exchange Act of 1934, as amended (the Exchange Act"), commonly
referred to as the "penny stock" rule. Section 15(g) sets forth certain
requirements for transactions in penny stocks and Rule 15g9(d)(1) incorporates
the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.
The Commission generally defines penny stock to be any equity security that has
a market price less than $5.00 per share, subject to certain exceptions. Rule
3a51-1 provides that any equity security is considered to be a penny stock
unless that security is: registered and traded on a national securities exchange
meeting specified criteria set by the Commission; authorized for quotation on
The NASDAQ Stock Market; issued by a registered investment company; excluded
from the definition on the basis of price (at least $5.00 per share) or the
registrant's net tangible assets; or exempted from the definition by the
Commission. Trading in the shares is subject to additional sales practice
requirements on broker-dealers who sell penny stocks to persons other than
established customers and accredited investors, generally persons with assets in
excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together
with their spouse.
For transactions covered by these rules, broker-dealers must make a special
suitability determination for the purchase of such securities and must have
received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the first transaction, of a
risk disclosure document relating to the penny stock market. A broker-dealer
also must disclose the commissions payable to both the broker-dealer and the
registered representative, and current quotations for the securities. Finally,
the monthly statements must be sent disclosing recent price information for the
penny stocks held in the account and information on the limited market in penny
stocks. Consequently, these rules may restrict the ability of broker dealers to
trade and/or maintain a market in the Company's common stock and may affect the
ability of shareholders to sell their shares.
As of June 30, 2005, there were approximately 981 holders of record of the
Company's common stock. As of June 30, 2005, the Company had 520,694 its common
stock issued and outstanding, 514,145 of which were restricted Rule 144 shares
and 6,549 of which were free-trading. Of the Rule 144 shares, 0 have been held
by affiliates of the Company for more than one (1) year.
Dividend Policy
The Company has never paid or declared any dividends on its common stock and
does not anticipate paying cash dividends in the foreseeable future.
There are no restrictions in the Company's articles of incorporation or
bylaws that prevent the Company from declaring dividends. The Nevada Revised
Statutes, however, do prohibit the Company from declaring dividends where, after
giving effect to the distribution of the dividend:
1. the Company would not be able to pay its debts as they become due in the
usual course of business; or
2. the Company's total assets would be less than the sum of its total
liabilities plus the amount that would be needed to satisfy the rights of
shareholders who have preferential rights superior to those receiving the
distribution.
16
EQUITY COMPENSATION PLAN INFORMATION
The following table shows information with respect to each equity compensation
plan under which OmniMed's common stock is authorized for issuance as of the
fiscal year ended December 31, 2004.
- ------------------------------------ ------------------------ ----------------------- ---------------------------
Plan category Number of securities Weighted average Number of securities
to be issued upon exercise price of remaining available for
exercise of outstanding options, future issuance under
outstanding options, warrants and rights equity compensation plans
warrants and rights (excluding securities
reflected in column (a)
- ------------------------------------ ------------------------ ----------------------- ---------------------------
(a) (b) (c)
- ------------------------------------ ------------------------ ----------------------- ---------------------------
Equity compensation plans approved 200,000 -0- 3,100,000
by security holders
- ------------------------------------ ------------------------ ----------------------- ---------------------------
Equity compensation plans not -0- -0- -0-
approved by security holders
- ------------------------------------ ------------------------ ----------------------- ---------------------------
Total -0- -0- -0-
- ------------------------------------ ------------------------ ----------------------- ---------------------------
LEGAL PROCEEDINGS
Bio-Solutions
In October 2003, Bio-Solutions of Northern Virginia, LLC and Joel H. Bernstein
filed a Motion for Judgment in the Circuit Court for the City of Alexandria,
Virginia alleging breach of contract, promissory estoppel, fraudulent inducement
to contract, fraud and misrepresentation and violation of Virginia Retail
Franchise Act. Additionally, also in October 2003, The Commonwealth of Virginia
State Corporation Commission issued a Rule to Show Cause regarding the Company's
failure to register the sale of a Virginia franchise to one of its residents.
The hearing on the Rule to Show Cause was held in January 2004. Any and all
obligations under the settlement agreement of this action have been assumed by
Bio-Solutions Franchise Corp., Bio-Solutions' formerly wholly-owned subsidiary
which was spun-off in 2004.
OmniMed
OmniMed is not a party to any pending legal proceeding, nor is its property the
subject of a pending legal proceeding, that is not in the ordinary course of
business or otherwise material to the financial condition of OmniMed's business.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
On May 16, 2005 Bio-Solutions was notified that Baum & Company, PA was resigning
as the Bio-Solutions' independent auditor.
Baum & Company, PA performed the audits for the two year period ended June 30,
2004, which reports for the two years ended June 30, 2004 and 2003 did not
contain any adverse opinion or a disclaimer of opinion, nor was it qualified as
to audit scope or accounting principles but did carry a modification as to going
concern for the years ended June 30, 2004 and 2003.
During the Registrant's two most recent fiscal years and during any subsequent
interim period prior to the May 16, 2005, resignation as the Company's
independent auditors, there were no disagreements with Baum & Company, PA, with
respect to accounting or auditing issues of the type discussed in Item
304(a)(iv) of Regulation S-B.
17
On May 16, 2005, the Company's board of directors approved the engagement of the
firm of Lawrence Scharfman & Company, 9608 Honey Bell Circle, Boynton Beach,
Florida 33437 as the Company's independent auditors. Such appointment was
accepted by Lawrence Scharfman of the firm.
During the Registrant's two most recent fiscal years or any subsequent interim
period prior to engaging Lawrence Scharfman & Company, the Company, or someone
on the Company's behalf, had not consulted Lawrence Scharfman & Company
regarding any of the accounting or auditing concerns stated in Item 304(a)(2) of
Regulation S-B.
On May 16, 2005 the Company provided Baum & Company, PA with a copy of this
disclosure and requested that it furnish a letter to the Company, addressed to
the SEC, stating that it agreed with the statements made herein or the reasons
why it disagreed.
RECENT SALES OF UNREGISTERED SECURITIES
In October 2002, Bio-Solutions issued 210,526 shares of restricted common stock
to satisfy $40,000 of advances made by a stockholder. In October 2002, the
Company issued 2,000,000 shares of restricted common stock to a stockholder for
his services. In April 2003, the Company issued 5,000,000 shares of restricted
common stock to 5 stockholders for their services.
In April 2003, Bio-Solutions issued 5,000,000 shares of restricted common stock
to employees and officers of the Company for compensation valued at $25,000. For
such offering, the Company relied upon the 506 Exemption.
In July 2003, Bio-Solutions issued 375,000 shares of restricted common stock to
settle a business dispute. In January 2004, the Company issued 55,000 shares of
restricted common stock in conjunction with the repurchase a franchise.
In July 2004, Bio-Solutions issued 40,000,000 shares of restricted common stock
in exchange for the agreement of the Company's largest creditors to cease
collection proceedings until December 31, 2004. These shares are also being used
as collateral for those creditors.
In August 2004, Bio-Solutions completed a one for 500 reverse split of its
common stock, and restated it capital stock at 110,000,000 authorized shares, of
which 10,000,000 are preferred stock and 100,000,000 are common. In February
2005, the Company issued 5,000,000 shares of restricted common stock in exchange
for $50,000 in cash, or $0.01 per share.
In February 2005, Bio-Solutions accepted a stock subscription in the amount of
$50,000 to be used for working capital and issued 5,000,000 shares of its
restricted common stock in exchange therefor.
* All of the above offerings and sales were deemed to be exempt under rule 506
of Regulation D and Section 4(2) of the Securities Act of 1933, as amended. No
advertising or general solicitation was employed in offering the securities. The
offerings and sales were made to a limited number of persons, all of whom were
accredited investors, business associates of Bio-Solutions or executive officers
of Bio-Solutions, and transfer was restricted by Bio-Solutions in accordance
with the requirements of the Securities Act of 1933. In addition to
representations by the above-referenced persons, we have made independent
determinations that all of the above-referenced persons were accredited or
sophisticated investors, and that they were capable of analyzing the merits and
risks of their investment, and that they understood the speculative nature of
their investment. Furthermore, all of the above-referenced persons were provided
with access to our Securities and Exchange Commission filings.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Bio-Solutions
The Company's directors and executive officers are indemnified as provided by
the Nevada Revised Statutes and the Company's Bylaws. These provisions state
that the Company's directors may cause the Company to indemnify a director or
former director against all costs, charges and expenses, including an amount
paid to settle an action or satisfy a judgment, actually and reasonably incurred
by him as a result of him acting as a director. The indemnification of costs can
include an amount paid to settle an action or satisfy a judgment. Such
indemnification is at the discretion of the Company's board of directors and is
subject to the Securities and Exchange Commission's policy regarding
indemnification.
18
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable.
Item 3.02 Unregistered Sales of Equity Securities.
See Item 2.01.
Item 4.01 Changes in Registrant's Certifying Accountant.
See Item 2.01.
Item 5.01 Changes in Control of Registrant.
See Item 2.01.
Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
See Item 2.01.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
In connection with the acquisition of OmniMed, the Company is changing its name
to OmniMed International, Inc.
In connection with the acquisition of OmniMed, the Company is changing its
fiscal year end to December 31.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of business acquired.
Report of Independent Registered Public Accounting Firm
OmniMed International, Inc. Balance Sheet as of June 30, 2005
OmniMed International, Inc. Statement of Operations For The Six Months Ended
June 30, 2005
19
OmniMed International, Inc. Statement of Stockholders' Equity For The Six Months
Ended June 30, 2005
OmniMed International, Inc. Statement of Cash Flows For The Six Months Ended
June 30, 2005
OmniMed International, Inc. Notes to Financial Statements
Report of Independent Registered Public Accounting Firm
OmniMed International, Inc. Balance Sheet as of December 31, 2004
OmniMed International, Inc. Statement of Operations For The Year Ended December
31, 2004
OmniMed International, Inc. Statement of Stockholders' Equity For The Year Ended
December 31, 2004
OmniMed International, Inc. Statement of Cash Flows For The Year Ended December
31, 2004
OmniMed International, Inc. Notes to Financial Statements
(b) Pro forma financial information.
Omnimed International, Inc. Pro forma Consolidated Financial Statements
Pro forma Consolidated Balance Sheet
Pro forma Consolidated Statements of Operations
Notes to Pro forma Consolidated Financial Statements
(c) Exhibits
Exhibit
Number Description
- --------------------------------------------------------------------------------
2.1 Agreement and Plan of Merger made as of November 1, 2005 among
Bio-Solutions International, Inc., OmniMed Acquisition Corp.,
OmniMed International, Inc., and the shareholders of OmniMed
International, Inc.
10.1 Employment Agreement by and between OmniMed International, Inc.
and Milton Hauser, dated February 1, 2004.
10.2 Employment Agreement by and between OmniMed International, Inc.
and Eric Rosenfeld, dated October 1, 2004.
10.3 Employment Agreement by and between OmniMed International, Inc.
and David Dorrance, dated February 1, 2005.
20
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
Bio-Solutions International, Inc.
Dated: November 3, 2005 By: /s/ Milton Hauser
-------------------------------
Name: Milton Hauser
Title: President
21
OMNIMED INTERNATIONAL, INC.
FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
OMNIMED INTERNATIONAL, INC.
(a development stage company)
FINANCIAL STATEMENTS
JUNE 30, 2005
INDEX
PAGE
REPORT OF INDEPENDENT AUDITORS 1
BALANCE SHEETS 2
AS AT JUNE 30, 2005 AND JUNE 30, 2004
STATEMENTS OF OPERATIONS 3
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND JUNE 30,2004
AND FOR THE PERIOD JULY 16, 1997 (INCEPTION) TO JUNE 30, 2005
STATEMENTS OF COMPREHENSIVE INCOME 4
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND JUNE 30, 2004
AND FOR THE PERIOD JULY 16,1997 (INCEPTION) TO JUNE 30, 2005
STATEMENTS OF DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE 4
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND JUNE 30, 2004
STATEMENT OF COMMON STOCK 5
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND JUNE 30, 2004
STATEMENTS OF ADDITIONAL PAID IN CAPITAL 5
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND JUNE 30, 2004
STATEMENTS OF CASH FLOWS 6
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND JUNE 30, 2004
AND FOR THE PERIOD JULY 16,1997(INCEPTION) TO JUNE 30, 2005
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION 7
FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND JUNE 30, 2004
AND FOR THE PERIOD JULY 16, 1997(INCEPTION) TO JUNE 30, 2005
NOTES TO FINANCIAL STATEMENTS 8 - 13
Report of Independent Auditors
Board of Directors
Omnimed International, Inc.
Las Vegas, Nevada
We have audited the accompanying balance sheet of Omnimed International, Inc. (a
development stage company) as of June 30, 2005 and June 30, 2004 and the related
statements of operations, comprehensive income, deficit accumulated during the
development stage, common stock, additional paid-in capital and cash flows for
the six months then ended and for the period July 16, 1997 (Inception) to June
30, 2005. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based upon our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America, which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Omnimed International, Inc. (a
development stage company) at June 30, 2005 and June 30, 2004 and the results of
its operations and cash flows for the six months and periods then ended in
conformity with accounting principles generally accepted in the United States of
America.
/S/ Katz & Bloom, LLC
Roslyn Heights, New York
August 19, 2005
OMNIMED INTERNATIONAL, INC.
(a development stage company)
BALANCE SHEET
ASSETS
June 30, June 30,
2005 2004
------------ ------------
Current Assets:
Cash and cash equivalents (Note A) $ 82,577 $ 53,483
Prepaid expenses 1,625 --
Total Current Assets 84,202 53,483
------------ ------------
Property and Equipment - at cost (Notes A and B) 154,880 95,517
Less accumulated depreciation (67,933) (44,987)
------------ ------------
Property and equipment - net 86,947 50,530
------------ ------------
Other Assets:
Capitalized software development costs-net of
amortization of $41,515 at June 30, 2005 and $12,210
at June 30, 2004 (Notes A and C) 105,010 134,315
Investments (Notes A and D) 1,712 123,000
Other intangible assets (Notes A and E) 7,387 7,387
Security deposit 2,785 2,785
------------ ------------
Total Other Assets 116,894 267,487
------------ ------------
Total $ 288,043 $ 371,500
============ ============
LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 21,223 $ 4,507
------------ ------------
Total Current Liabilities 21,223 4,507
Long -Term Liabilities
Loan payable - stockholder (Note F) 323,528 --
Total Liabilities 344,751 4,507
Commitments and Contingencies (Notes I & J) -- --
Stockholders' (Deficiency) Equity:
Common Stock par value $.001: shares
Authorized, 50,000,000 issued and outstanding
48,209,500 48,210
Common stock to be issued (Note I) 1,046
Additional paid-in capital 1,189,627 1,150,593
Deficit accumulated during development stage (1,295,591) (831,810)
------------ ------------
Total Stockholders' (Deficiency) Equity (56,708) 366,993
------------ ------------
Total $ 288,043 $ 371,500
============ ============
The accompanying notes are an integral part of these financial statements.
2
OMNIMED INTERNATIONAL, INC.
(a development stage company)
STATEMENTS OF OPERATIONS
Six Months Ended Six Months Ended July 16, 1997
(Inception) to
June 30, 2005 June 30, 2004 June 30, 2005
-------------- -------------- --------------
Revenues $ - $ - $ -
Expenses
Executive compensation 71,000 90,000 563,175
Contracted technology development and service 18,500 12,000 57,198
Depreciation and amortization 27,049 20,066 109,448
Rent 10,378 9,234 47,745
Travel and entertainment 500 5,333 47,836
Office expenses 28,937 1,718 51,975
Legal fees 15,271 4,810 32,295
Professional services and consulting 18,000 - 116,557
Contracted marketing 57,575 - 66,802
Telephone and internet 3,576 7,484 28,102
Interest 2,189 - 2,189
Website design and development 5,050 3,662 19,882
Other 5,653 5,210 36,153
Repairs and maintenance - - 7,269
Total Expenses 263,678 1,186,626
-------------- -------------- --------------
159,517
Net Loss From Operations (263,678) (159,517) (1,186,626)
-------------- -------------- --------------
Other Revenue (Loss)
Dividend income 247 17 632
Realized gain (loss) on sale of securities - 13,084 (79,891)
-------------- -------------- --------------
Total Other Revenue (Loss) 247 13,101 (79,259)
-------------- -------------- --------------
Net loss before provision for income taxes (263,431) (146,416) (1,265,885)
Income tax benefit (Note G) - - -
Net loss $ (263,431) $ (146,416) $ (1,265,885)
============== ============== ============
The accompanying notes are an integral part of these financial statements.
3
OMNIMED INTERNATIONAL, INC.
(a development stage company)
STATEMENTS OF COMPREHENSIVE INCOME
Six Months Six Months July 16, 1997
Ended Ended (Inception) to
June 30, 2005 June 30, 2004 June 30, 2005
------------- ------------- --------------
Net loss $ (263,431) $ (146,416) $(1,265,885)
Other Comprehensive Income:
Unrealized appreciation (depreciation)
of securities 112 (83,250) (29,706)
----------- ----------- -----------
Total Comprehensive Income (Loss) $ (263,319) $ (229,666) $(1,295,591)
=========== =========== ===========
STATEMENT OF DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE
Six Months Ended Six Months Ended
June 30, 2005 June 30, 2004
---------------- ----------------
Deficit accumulated during the development
stage - Beginning of period $ (1,032,272) $ (602,144)
Net loss (263,431) (146,416)
Other comprehensive income (loss) 112 (83,250)
------------ ----------
Deficit accumulated during the development
stage - End of period $(1,295,591) $ (831,810)
============ ==========
The accompanying notes are an integral part of these financial statements.
4
OMNIMED INTERNATIONAL, INC.
(a development stage company)
STATEMENT OF COMMON STOCK
For the Six Months Ended June 30, 2005 and June 30, 2004
COMMON COMMON
SHARES STOCK
---------- --------
Balance - June 30, 2004 and June 30,2005 48,209,500 $ 48,210
========== ========
STATEMENTS OF ADDITIONAL PAID-IN CAPITAL
Six Months Ended Six Months Ended
June 30, 2005 June 30, 2004
------------- -------------
Balance - Beginning of period $ 1,184,065 $ 1,043,289
Excess of fair value over par value of stock to be
issued to contracted consultants in exchange for services 5,562 -
Corporate Obligations paid by stockholder 107,304
-
Balance - End of period $ 1,189,627 $ 1,150,593
============= =============
The accompanying notes are an integral part of these financial statements.
5
OMNIMED INTERNATIONAL, INC.
(a development stage company)
STATEMENTS OF CASH FLOWS
Six Months Six Months July 16, 1997
Ended Ended (Inception) to
June 30, June 30, June 30,
2005 2004 2005
------------ ------------- -----------
Cash Flows From Operating Activities:
Net loss $ (263,431) $ (146,416) $(1,265,885)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 27,049 20,066 109,448
Accrued interest shareholder loans 2,189 - 2,189
Expenses paid by loans from stockholder 31,892 - 31,892
Expenses incurred in exchange for common stock 6,181 - 10,456
Expenses paid by stockholder - contributed to
capital (Note I) - 105,375 642,369
Realized loss (gain) on sale of securities - (13,084) 79,891
Changes in assets and liabilities:
Prepaid expenses 206 1,522 (1,625)
Accrued expenses 15,010 2,007 21,223
------------ ------------- -----------
Net Cash Used In Operating Activities (180,904) (30,530) (370,042)
------------ ------------- -----------
Cash Flows Provided By Investing Activities:
Purchase of property and equipment (2,490) - (2,490)
Proceeds from sale of investments - 81,834 195,109
------------ ------------- -----------
Net Cash Provided by Investing Activities (2,490) 81,834 192,619
------------ ------------- -----------
Cash Flows Provided by Financing Activities:
Loans from stockholder 260,000 - 260,000
------------ ------------- -----------
Net increase in cash and
cash equivalents 76,606 51,304 82,577
Cash and cash equivalents-beginning of period 5,971 2,179 -
------------ ------------- -----------
Cash and cash equivalents-end of period $ 82,577 $ 53,483 $ 82,577
============ ============= ===========
The accompanying notes are an integral part of these financial statements.
6
OMNIMED INTERNATIONAL, INC.
(a development stage company)
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Six Months Six Months July 16, 1997
Ended Ended (Inception) to
June 30, 2005 June 30, 2004 June 30, 2005
------------- ------------- -------------
Cash paid for income taxes None None None
Cash paid for interest None None None
During the six months ended June 30, 2005, one of the principal stockholders
paid Company obligations in the amount of $62,661. This amount was in addition
to direct loans to the company in the amount of $260,000.
During the period July 16, 1997 (Inception) to June 30, 2005 one of the
principal stockholders paid company obligations in the amount of $905,318 in
addition to contributing assets of $275,000 to capital and loans of $260,000 to
the Company.
During the six months ended June 30, 2004, one of the principal stockholders
paid company obligations in the amount of $107,304. This amount was contributed
to additional paid-in capital.
The accompanying notes are an integral part of these financial statements.
7
OMNIMED INTERNATIONAL, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2005
Note A. Nature of Business and Significant Accounting Policies
------------------------------------------------------
Organization - Omnimed International, Inc. (Company) was incorporated on July
16, 1997 under the laws of the State of Nevada.
Development Stage Company- The Company is a development stage company and has
not generated any revenues. During the development period, the company is
developing its information technology and other intangible assets and is
attempting to market the company's products. The company is in the process of
developing a system of gathering, digitizing, storing and distributing
information for the healthcare field.
Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
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 and the reported amounts of
revenue and expense during the reporting period. Actual results could differ
from those estimates.
Fair Value of Financial Instruments - The Company's financial instruments, which
include cash, prepaid expenses, securities, and accounts payable approximate
fair value due to the short-term nature of these assets and liabilities. During
the six months ended June 30, 2004, the company recorded a loss of $83,250 on
the decline in value of the Company's interest in a marketable security.
Cash and Cash Equivalents - For purposes of these financial statements, cash
equivalents include a highly liquid debt instrument with a maturity of less than
three months.
Long-Lived Assets - The Company evaluates long-lived assets for impairment under
Financial Accounting Standards Board (FASB) Statement No. 121 "Accounting for
the Impairment of Long-Lived Assets to be Disposed Of". Under these rules,
long-term and intangible assets are evaluated for possible impairment when
events or circumstances indicate that the carrying amount of those assets may
not be recoverable. Measurement of the impairment loss, if any, is based upon
the difference between the assets carrying value in the financial statements and
its estimated fair value. During the development stage there have been no such
losses recorded.
Income Taxes - The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting For Income
Taxes". The provision for income taxes is comprised of current and deferred
components. The current component presents the amount of federal and state
income taxes that are currently reportable to the respective tax authorities and
is measured by applying statutory rates to the Company's taxable income as
reported in its income tax returns. For the six months ended June 30, 2005 and
June 30, 2004 and for the period July 16, 1997 (Inception) to June 30, 2005
there is no current provision for income taxes as the Company has reported
losses on all income tax returns filed.
8
OMNIMED INTERNATIONAL, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2005
(continued)
Note A. Nature of Business and Significant Accounting Policies (cont'd)
------------------------------------------------------
Income taxes- (continued)
Deferred income taxes are provided for the temporary differences between the
carrying values of the Company's assets and liabilities for financial reporting
purposes and their corresponding income tax basis. These temporary differences
are primarily attributable to net operating losses, depreciation, and research
and development costs, which due to income tax laws become taxable or deductible
in different years than their corresponding treatment for financial reporting
purposes. The temporary differences give rise to either a deferred tax asset or
liability in the financial statements, which is computed by applying statutory
tax rates to taxable or deductible temporary differences based upon
classification (i.e., current or non-current) of the asset or liability in the
financial statements which relate to the particular temporary difference.
Property and Equipment - is recorded at cost. Costs of maintenance and repairs
are charged to expense as incurred. Depreciation is provided using the
straight-line method over the estimated useful life of each asset.
Trademark Costs - Costs incurred in the registration and acquisition of
trademarks and trademark rights are capitalized. These costs will be amortized
over the legal life of the related trademark once the trademark is awarded. In
accordance with the provisions of Statement of Financial Accounting Standards
No. 142 (SFAS No. 142), Goodwill and Other Intangible Assets, the Company
performs an annual review of its identified intangible assets to determine if
facts and circumstances exist which indicate that the useful life is shorter
than originally estimated or that the carrying amount of the assets may not be
recoverable. During the six months ended June 30, 2005 and June 30, 2004 there
were no such impairment losses.
Capitalized Software Development Costs - The Company's policy is to capitalize
computer software costs in accordance with Statement of Position 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use" Under SOP 98-1, costs incurred in creating software to gather,
digitize, store and distribute medical information once the application
development stage is reached, are capitalized. The application development stage
is when a working model/concept, is established. Costs incurred in developing
the product from this point until the product is available for release to
customers are capitalized and includes contracted labor including supervision of
the product developers and other outside consultant costs. Amortization of these
costs started February 2004, when the product was first available for release to
customers and is being recovered on the straight-line basis over the estimated
economic life of sixty months. The Company reviews the amounts capitalized for
impairment whenever events or circumstances indicate that the carrying amounts
of the assets may not be recoverable.
9
OMNIMED INTERNATIONAL, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2005
(continued)
Note A. Nature of Business and Significant Accounting Policies (cont'd)
------------------------------------------------------
Capitalized Software Development Costs- (continued)
During the years six months ended June 30, 2005 and June 30, 2004, the Company
has concluded that no impairment charges are required.
The Company expenses all software costs associated with the conceptual
formulation and evaluation of alternatives until the application development
stage has been reached. Costs to improve or support the technology are expensed
as these costs are incurred.
Comprehensive Income- Statement of Financial Accounting Standards No. 130,
Reporting Comprehensive Income (SFAS 130), requires the reporting of
comprehensive income in addition to net income from operations. Comprehensive
income is a more inclusive financial reporting methodology that includes
disclosures of certain financial information that historically has not been
recognized in the calculation of net income. For all of the periods presented,
the Company's comprehensive income is presented in the Statement of
Comprehensive Income, and includes unrealized gains and losses on marketable
securities net of the related estimated deferred income tax effect associated
with those gains and losses.
Investments- The Company's investments in marketable securities are classified
as "available for sale" securities, and are carried on the financial statements
at market value. Realized gains and losses are included in earnings; unrealized
gains and losses are reported as a separate component of stockholders' equity
and as a component of "Other Comprehensive Income."
Off-balance Sheet Arrangements- The Company does not have any off-balance sheet
financing or any unconsolidated special purpose entities.
Stock Based Compensation- The Company accounts for stock based compensation in
accordance with Statement of Financial Accounting Standards No. 148 (SFAS 148),
"Accounting for Stock Based Compensation-Transition and Disclosure", an
amendment to SFAS No. 123. Under these pronouncements, the Company uses the fair
value based method of accounting for its stock option plan and for stock issued
in exchange for services.
Revenue Recognition- The Company intends to generate revenue from licensing the
right to utilize its proprietary software for the storage and distribution of
healthcare information to individuals and affinity groups. As previously
described, the Company is a development stage company and has not generated any
revenues. The Company's technology was available for sale or lease in February
2004. Once sales commence, the Company will recognize revenue on the accrual
basis over the related license period.
10
OMNIMED INTERNATIONAL, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2005
(continued)
Note B. Property and Equipment
Property and equipment consists of:
Useful
June 30, 2005 June 30, 2004 Life
------------- ------------- -------
Computer equipment $ 136,933 $ 84,287 5 years
Office furniture 12,928 11,230 7 years
Office equipment 2,529 - 5 years
Software 2,490 - 3 years
------------ -------------
Total property and equipment $ 154,880 $ 95,517
============ =============
Depreciation is provided by the straight-line method over the estimated useful
life of the related assets utilizing a half- year convention in the year
acquired. Depreciation expense for the six months ended June 30, 2005 was
$12,397 and for the six months ended June 30, 2004 was $7,856.
Note C. Capitalized Software Development Costs
--------------------------------------
As described in Note A to the financial statements, the Company's policy is to
capitalize software development costs in accordance with Statement of Position
98-1, "Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use. At June 30, 2005 and June 30, 2004 the Company had capitalized
$146,525 of costs related to the development of proprietary software that the
Company will license to its customers for the storage and distribution of
medical information. Management estimates the economic useful life of this
software technology to be sixty months, consequently, capitalized software
development costs are being amortized on a straight-line basis over a period of
sixty months beginning in February 2004, the month the product became available
for sale. Amortization for the six months ended June 30, 2005 was $14,652 and
for the six months ended June 30, 2004 was $12,210.
Note D. Investments
-----------
The Company has an investment in a marketable security that is available for
sale. The security was contributed to additional paid-in capital by one of the
Company's major shareholders. At June 30, 2005, the Company had 16,000
restricted shares of stock of Poseidis Incorporated that will be available for
sale during 2005. These shares were acquired as a result of a stock dividend in
2004 on 160,000 shares of Poseidis that the Company owned.
At June 30, 2004 the Company owned 300,000 shares of Poseidis that had a market
value of $123,000 and a cost of $206,250.
11
OMNIMED INTERNATIONAL, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2005
(continued)
Note E. Other Intangible Assets
-----------------------
At June 30, 2005 and June 30, 2004, other intangible assets consisted of $3,257
of capitalized design costs relating to logo's for the Company's principal
product and $4,130 of legal fees and other costs related to trademark
registration. The Company will amortize the logo costs over a period of
thirty-six months beginning in the month the Company realizes its first sale and
the trademark costs over the legal life of the trademark when awarded.
Note F. Loan Payable Stockholder
------------------------
At June 30, 2005, the Company owed a majority stockholder $323,528 including
accrued interest of $2,189. The loan bears interest at the rate of seven percent
per annum and has no fixed maturity date.
Note G. Stock Based Compensation
------------------------
As disclosed in Note A to the financial statements, the Company has adopted the
provisions of SFAS No.148, "Accounting for Stock Based Compensation- Transition
and Disclosure", which requires that stock awards granted subsequent to January
1995 be recognized as compensation expense based on the fair value at the date
of the grant. During the six months ended June 30, 2005, the Company incurred
additional compensation expense in the amount of $6,181 to consultants for
shares issued or to be issued in exchange for services. The Board of Directors
determined that the fair value of the Company's shares to be $.01 per share.
Note H. Income Taxes
------------
The Company is a development stage company and has reported losses in each year
since inception. Accordingly, net deferred tax assets primarily attributable to
net operating loss carry forwards have been reduced to zero as a result of a
100% valuation allowance based upon the uncertainty regarding realization of
such tax benefits given the Company's losses.
The tax benefits relating to these net operating losses expire 20 years after
realizing such losses. At June 30, 2005, the Company had approximately
$1,050,000 of net operating losses expiring during various years beginning in
2017.
12
OMNIMED INTERNATIONAL, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2005
(continued)
Note I. Commitments and Contingencies
During the year 1999, the Company created the 1999 Stock Option Plan (Plan) to
attract and retain the best qualified personnel. Under the Plan, the Company
reserved 3,300,000 shares of its common stock to be given to employees and
independent contractors as additional compensation as determined by the Board of
Directors. The options under the Plan are intended to qualify as Incentive Stock
Options (ISO's) under Section 422 of The Internal Revenue Code.
At June 30, 2005, the Company had granted options to purchase 250,000 shares of
the Company's stock to five key employees.
The Company has employment agreements with seven key employees that specify
total minimum annual salaries of $264,000. One of these employees is the
Company's principal shareholder and founder. Several of the employees did not
receive the minimum salary as provided for in their agreements and have waived
their right to receive the unpaid salary.
In connection with these employment agreements, the Company is going to issue
1,290,000 shares of its stock to four key employees as an additional incentive
to commit to employment with the Company. At June 30, 2005, 1,045,500 of these
shares were vested but not issued. These shares will be issued during 2005.
The Company is obligated under a lease for office space in New Jersey commencing
November 2003 and expiring in October 2008. The lease also provides for
additional rent for increases in operating expenses. Future minimum rent
payments under the lease are:
June 30,
2006 18,673
2007 19,912
2008 21,149
2009 7,222
Note J. Related Party Transactions
--------------------------
As previously described in the financial statements, the Company has not
generated any operating revenues. The Company has been able to continue
operations due to the payment of company obligations by one of its principal
stockholders as an additional contribution to capital, loans to the Company and
contributions of assets. This stockholder made payments aggregating $1,180,318
during the period July 16, 1997 (Inception) to June 30, 2005.
As disclosed in Note F to the financial statements the Company was indebted to
the principal stockholder in the amount of $323,528 at June 30, 2005. During the
period January 1, 2005 to June 30, 2005 the stockholder loaned the Company
$260,000 and paid Company obligates of $61,339.
13
OMNIMED INTERNATIONAL, INC.
(a development stage company)
FINANCIAL STATEMENTS
DECEMBER 31, 2004
INDEX
PAGE
REPORT OF INDEPENDENT AUDITORS 1
BALANCE SHEETS 2
AS AT DECEMBER 31, 2004 AND DECEMBER 31, 2003
STATEMENTS OF OPERATIONS 3
FOR THE YEARS ENDED DECEMBER 31, 2004 AND DECEMBER 31, 2003 AND
FOR THE PERIOD JULY 16, 1997 (INCEPTION) TO DECEMBER 31, 2004
STATEMENTS OF COMPREHENSIVE INCOME 4
FOR THE YEARS ENDED DECEMBER 31, 2004 AND DECEMBER 31, 2003 AND
FOR THE PERIOD JULY 16, 1997 (INCEPTION) TO DECEMBER 31, 2004
STATEMENTS OF DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE 4
FOR THE YEARS ENDED DECEMBER 31, 2003 AND DECEMBER 31, 2004
STATEMENTS OF COMMON STOCK 5
FOR THE YEARS ENDED DECEMBER 31, 2003 AND DECEMBER 31, 2004
STATEMENTS OF ADDITIONAL PAID IN CAPITAL 5
FOR THE YEARS ENDED DECEMBER 31, 2003 AND DECEMBER 31, 2004
STATEMENTS OF CASH FLOWS 6
FOR THE YEARS ENDED DECEMBER 31, 2004 AND DECEMBER 31, 2003 AND
FOR THE PERIOD JULY 16, 1997(INCEPTION) TO DECEMBER 31, 2004
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION 7
FOR THE YEARS ENDED DECEMBER 31, 2004 AND DECEMBER 31, 2003 AND
FOR THE PERIOD JULY 16, 1997(INCEPTION) TO DECEMBER 31, 2004
NOTES TO FINANCIAL STATEMENTS 8 - 14
Report of Independent Auditors
Board of Directors
Omnimed International, Inc.
Las Vegas, Nevada
We have audited the accompanying balance sheets of Omnimed International, Inc.
(a development stage company) as of December 31, 2004, and December 31, 2003 and
the related statements of operations, comprehensive income, deficit accumulated
during the development stage, common stock, additional paid-in capital and cash
flows for the years then ended and for the period July 16, 1997 (Inception) to
December 31, 2004. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based upon our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America, which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Omnimed International, Inc. (a
development stage company) at December 31, 2004 and December 31, 2003 and the
results of its operations and cash flows for the years and periods then ended in
conformity with accounting principles generally accepted in the United States of
America.
/S/ Katz & Bloom
Roslyn Heights, New York
August 17, 2005
1
OMNIMED INTERNATIONAL, INC.
(a development stage company)
BALANCE SHEETS
ASSETS
------
December 31,
2004 2003
Current Assets:
Cash and cash equivalents (Note A) $ 5,971 $ 2,179
Prepaid expenses 1,831 1,522
----------- -----------
Total Current Assets 7,802 3,701
----------- -----------
Property and Equipment - at cost (Notes A and B) 122,944 93,588
Less accumulated depreciation (55,536) (37,131)
----------- -----------
Property and equipment - net 67,408 56,457
----------- -----------
Other Assets:
Capitalized software development costs-net of amortization
of $26,863 at December 31, 2004 (Notes A and C) 119,662 146,525
Investments (Notes A and D) 275,000
Other intangible assets (Notes A and E) 7,387 7,387
Security deposit 2,785 2,785
----------- -----------
Total Other Assets 131,434 431,697
----------- -----------
Total $ 206,644 $ 491,855
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 6,213 $ 2,500
----------- -----------
Total Current Liabilities 6,213 2,500
----------- -----------
Commitments and Contingencies (Notes H,I & J) -- --
Stockholders' Equity:
Common Stock par value $.001: shares
authorized, 50,000,000 issued and outstanding
48,209,500 48,210 48,210
Common stock to be issued (Note H) 428 --
Additional paid-in capital 1,184,065 1,043,289
Deficit accumulated during development stage (1,032,272) (602,144)
----------- -----------
Total Stockholders' Equity 200,431 489,355
----------- -----------
Total $ 206,644 $ 491,855
=========== ===========
The accompanying notes are an integral part of these financial statements.
2
OMNIMED INTERNATIONAL, INC.
(a development stage company)
STATEMENTS OF OPERATIONS
July 16,1997
Year Ended Year Ended (Inception) to
December 31, December 31, December 31,
2004 2003 2004
------------ ------------ ------------
Revenues $ - $ - $ -
Expenses
Executive compensation 170,000 123,225 492,175
Contracted technology development 28,000 - 38,698
Depreciation and amortization 45,268 16,577 82,399
Rent 18,261 11,081 37,367
Travel and entertainment 9,432 - 47,336
Office expenses 3,732 6,525 23,038
Legal fees 9,273 1,415 17,024
Professional services and consulting 4,950 750 98,557
Contracted marketing 9,317 - 9,317
Telephone and internet 10,923 - 24,526
Repairs and maintenance 269 - 7,269
Website design and development 4,863 3,300 14,832
Other 6,421 437 30,410
------------ ------------ ------------
Total Expenses 320,709 163,310 922,948
------------ ------------ ------------
Net Loss From Operations (320,709) (163,310) (922,948)
------------ ------------ ------------
Other Revenue (Loss)
Dividend income 290 - 385
Realized loss on sale of securities (79,891) - (79,891)
------------ ------------ ------------
Total Other Revenue (Loss) (79,601) - (79,506)
------------ ------------ ------------
Net loss before provision for income taxes (400,310) (163,310) (1,002,454)
Income tax benefit (Note G) - - -
------------ ------------ ------------
Net loss $ (400,310) $ (163,310) $ (1,002,454)
------------ ------------ ------------
The accompanying notes are an integral part of these financial statements.
3
OMNIMED INTERNATIONAL, INC.
(a development stage company)
STATEMENTS OF COMPREHENSIVE INCOME
July 16, 1997
Year Ended Year Ended (Inception) to
December 31, 2004 December 31, 2003 December 31, 2004
----------------- ----------------- -----------------
Net loss $ (400,310) $ (163,310) $ (1,002,454)
Other Comprehensive Income:
Unrealized depreciation of securities (29,818) - (29,818)
---------- ---------- ------------
Total Comprehensive Income (Loss) $ (430,128) $ (163,310) $ (1,032,272)
========== ========== ============
STATEMENTS OF DEFICIT ACCUMULATED DURING THE DEVELOPMENT STAGE
Year Ended Year Ended
December 31, December 31,
2004 2003
------------ ------------
Deficit accumulated during the development
stage - beginning of period $ (602,144) $ (438,834)
Net loss (400,310) (163,310)
Other comprehensive income (loss) (29,818) -
----------- -----------
Deficit accumulated during the development
stage - end of period $(1,032,272) $ (602,144)
=========== ===========
4
OMNIMED INTERNATIONAL, INC.
(a development stage company)
STATEMENTS OF COMMON STOCK
For the Years Ended December 31, 2003 and December 31, 2004
COMMON COMMON
SHARES STOCK
---------- ----------
Balance - December 31, 2003 and December 31, 2004 48,209,500 $ 48,210
========== ==========
STATEMENTS OF ADDITIONAL PAID-IN CAPITAL
For the Years Ended December 31, 2003 and December, 31 2004
Balance - January 1, 2003 $ 584,479
Assets contributed by stockholder 275,000
Corporate obligations paid by stockholder 183,810
----------
Balance - December 31, 2003 1,043,289
Corporate obligations paid by stockholder 136,929
Excess of fair value over par value of stock to be issued
to contracted consultants in exchange for services 3,847
----------
Balance - December 31, 2004 $ 1,184,065
The accompanying notes are an integral part of these financial statements.
5
OMNIMED INTERNATIONAL, INC.
(a development stage company)
STATEMENTS OF CASH FLOWS
July 16, 1997
Year Ended Year Ended (Inception) to
December 31, 2004 December 31, 2003 December 31, 2004
----------------- ----------------- -----------------
Cash Flows From Operating Activities:
Net loss $ (400,310) $ (163,310) $(1,002,454)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 45,268 16,577 82,399
Realized loss on sale of securities 79,891 - 79,891
Expenses incurred in exchange for
common stock 4,275 4,275
Expenses paid by stockholder -
contributed to capital (Note I) 76,155 122,114 642,369
Changes in assets and liabilities:
Prepaid expenses (309) (1,522) (1,831)
Accrued expenses 3,713 2,500 6,213
------------ ------------ -----------
Net Cash Used In Operating Activities (191,317) (23,641) (189,138)
------------ ------------ -----------
Cash Flows Provided By Investing Activities:
Proceeds from sale of investments 195,109 - 195,109
------------ ------------ -----------
Net increase (decrease) in cash and
cash equivalents 3,792 (23,641) 5,971
Cash and cash equivalents-beginning of period 2,179 25,820 -
------------ ------------ -----------
Cash and cash equivalents-end of period $ 5,971 $ 2,179 $ 5,971
============ ============ ===========
The accompanying notes are an integral part of these financial statements.
6
OMNIMED INTERNATIONAL, INC.
(a development stage company)
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
July 16, 1997
Year Ended Year Ended (Inception) to
December 31, December 31, December 31,
2004 2003 2004
------------ ------------ --------------
Cash paid for income taxes None None None
Cash paid for interest None None None
During the year ended December 31, 2004, one of the principal stockholders paid
Company obligations in the amount of $136,929. This amount was contributed to
additional paid-in capital.
During the year ended December 31, 2003, one of the principal stockholders paid
Company obligations in the amount of $183,810. This amount was contributed to
additional paid-in capital.
The accompanying notes are an integral part of these financial statements.
7
OMNIMED INTERNATIONAL, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
Note A. Nature of Business and Significant Accounting Policies
------------------------------------------------------
Organization - Omnimed International, Inc. (Company) was incorporated on July
16, 1997 under the laws of the State of Nevada.
Development Stage Company- The Company is a development stage company and has
not generated any revenues. During the development period, the company is
developing its information technology and other intangible assets and is
attempting to market the company's products. The company is in the process of
developing a system of gathering, digitizing, storing and distributing
information for the healthcare field.
Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
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 and the reported amounts of
revenue and expense during the reporting period. Actual results could differ
from those estimates.
Fair Value of Financial Instruments - The Company's financial instruments, which
include cash, prepaid expenses, securities, and accounts payable approximate
fair value due to the short-term nature of these assets and liabilities.
Cash and Cash Equivalents - For purposes of these financial statements, cash
equivalents include a highly liquid debt instrument with a maturity of less than
three months.
Long-Lived Assets - The Company evaluates long-lived assets for impairment under
Financial Accounting Standards Board (FASB) Statement No. 121 "Accounting for
the Impairment of Long-Lived Assets to be Disposed Of". Under these rules,
long-term and intangible assets are evaluated for possible impairment when
events or circumstances indicate that the carrying amount of those assets may
not be recoverable. Measurement of the impairment loss, if any, is based upon
the difference between the assets carrying value in the financial statements and
its estimated fair value. During the development stage there have been no such
losses recorded.
Income Taxes - The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting For Income
Taxes". The provision for income taxes is comprised of current and deferred
components. The current component presents the amount of federal and state
income taxes that are currently reportable to the respective tax authorities and
is measured by applying statutory rates to the Company's taxable income as
reported in its income tax returns. For each of the years presented in these
financial statements and for the period August 12, 1997(Inception) to December
31, 2004 there is no current provision for income taxes as the Company has
reported losses on all income tax returns filed.
8
OMNIMED INTERNATIONAL, INC.
(a development stage company)
PAGE 9
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
(continued)
Note A. Nature of Business and Significant Accounting Policies (cont'd)
----------------------------------------------------------------
Income taxes- (continued)
Deferred income taxes are provided for the temporary differences between the
carrying values of the Company's assets and liabilities for financial reporting
purposes and their corresponding income tax basis. These temporary differences
are primarily attributable to net operating losses, depreciation, and research
and development costs, which due to income tax laws become taxable or deductible
in different years than their corresponding treatment for financial reporting
purposes. The temporary differences give rise to either a deferred tax asset or
liability in the financial statements, which is computed by applying statutory
tax rates to taxable or deductible temporary differences based upon
classification (i.e., current or non-current) of the asset or liability in the
financial statements which relate to the particular temporary difference.
Property and Equipment - is recorded at cost. Costs of maintenance and repairs
are charged to expense as incurred. Depreciation is provided using the
straight-line method over the estimated useful life of each asset.
Trademark Costs - Costs incurred in the registration and acquisition of
trademarks and trademark rights are capitalized. These costs will be amortized
over the legal life of the related trademark once the trademark is awarded. In
accordance with the provisions of Statement of Financial Accounting Standards
No. 142 (SFAS No. 142), Goodwill and Other Intangible Assets, the Company
performs an annual review of its identified intangible assets to determine if
facts and circumstances exist which indicate that the useful life is shorter
than originally estimated or that the carrying amount of the assets may not be
recoverable. During the years ended December 31, 2004, and December 31, 2003
there were no such impairment losses.
Capitalized Software Development Costs - The Company's policy is to capitalize
computer software costs in accordance with Statement of Position 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use" Under SOP 98-1, costs incurred in creating software to gather,
digitize, store and distribute medical information once the application
development stage is reached, are capitalized. The application development stage
is when a working model/concept, is established. Costs incurred in developing
the product from this point until the product is available for release to
customers are capitalized and includes contracted labor including supervision of
the product developers and other outside consultant costs. Amortization of these
costs started February 2004, when the product was first available for release to
customers and is being recovered on the straight-line basis over the estimated
economic life of sixty months. The Company reviews the amounts capitalized for
impairment whenever events or circumstances indicate that the carrying amounts
of the assets may not be recoverable.
9
OMNIMED INTERNATIONAL, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
(continued)
Note A. Nature of Business and Significant Accounting Policies (cont'd)
----------------------------------------------------------------
Capitalized Software Development Costs- (continued)
During the years ended December 31, 2004 and December 31, 2003, the Company has
concluded that no impairment charges are required.
The Company expenses all software costs associated with the conceptual
formulation and evaluation of alternatives until the application development
stage has been reached. Costs to improve or support the technology are expensed
as these costs are incurred.
Comprehensive Income- Statement of Financial Accounting Standards No. 130,
Reporting Comprehensive Income (SFAS 130), requires the reporting of
comprehensive income in addition to net income from operations. Comprehensive
income is a more inclusive financial reporting methodology that includes
disclosures of certain financial information that historically has not been
recognized in the calculation of net income. For all of the periods presented,
the Company's comprehensive income is presented in the Statement of
Comprehensive Income, and includes unrealized gains and losses on marketable
securities net of the related estimated deferred income tax effect associated
with those gains and losses.
Investments- The Company's investments in marketable securities are classified
as "available for sale" securities, and are carried on the financial statements
at market value. Realized gains and losses are included in earnings; unrealized
gains and losses are reported as a separate component of stockholders' equity
and as a component of "Other Comprehensive Income."
Off Balance Sheet Arrangements- The Company does not have any off-balance sheet
financing or any unconsolidated special purpose entities.
Stock Based Compensation- The Company accounts for stock based compensation in
accordance with Statement of Financial Accounting Standards No. 148 (SFAS 148),
"Accounting for Stock Based Compensation-Transition and Disclosure", an
amendment to SFAS No. 123. Under these pronouncements, the Company uses the fair
value based method of accounting for its stock option plan and for stock issued
in exchange for services.
Revenue Recognition- The Company intends to generate revenue from licensing the
right to utilize its proprietary software for the storage and distribution of
healthcare information to individuals and affinity groups. As previously
described, the Company is a development stage company and has not generated any
revenues. The Company's technology was available for sale or lease in February
2004. Once sales commence, the Company will recognize revenue on the accrual
basis over the related license period.
10
OMNIMED INTERNATIONAL, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
(continued)
Note B. Property and Equipment
Property and equipment consists of:
December 31, December 31, Useful
2004 2003 Life
----------- ----------- -------
Computer equipment $ 107,487 $ 84,287 5 years
Office furniture 12,928 9,301 7 years
Office equipment 2,529 - 5 years
Total property and equipment $ 122,944 $ 93,588
Depreciation is provided by the straight-line method over the estimated useful
life of the related assets utilizing a half- year convention in the year
acquired. Depreciation expense amount to $18,405 for the year ended December 31,
2004 and $16,577 for the year ended December 31, 2003.
Note C. Capitalized Software Development Costs
--------------------------------------
As described in Note A to the financial statements, the Company's policy is to
capitalize software development costs in accordance with Statement of Position
98-1, "Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use. At December 31, 2004 and 2003 the Company had capitalized $146,525
of costs related to the development of proprietary software that the Company
will license to its customers for the storage and distribution of medical
information. Management estimates the economic useful life of this software
technology to be sixty months, consequently, capitalized software development
costs are being amortized on a straight-line basis over a period of sixty months
beginning in February 2004, the month the product became available for sale.
Amortization for the year ended December 31, 2004 was $26,863.
Note D. Investments
-----------
The Company has an investment in a marketable security that is available for
sale. The security was contributed to additional paid-in capital by one of the
Company's major shareholders. At December 31, 2004, the Company had 16,000
restricted shares of stock of Poseidis Incorporated that will be available for
sale during 2005. These shares were acquired as a result of a stock dividend on
160,000 shares of Poseidis that the Company owned. At December 31, 2003 the
Company owned 50,000 shares of Poseidis Incorporated with a value of $275,000.
During 2004 the stock split eight for one, prior to the stock dividend. During
2004, the Company sold all of its initial shares of Poseidis Incorporated stock.
11
OMNIMED INTERNATIONAL, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
(continued)
Note E. Other Intangible Assets
-----------------------
At December 31, 2003 and December 31, 2004, other intangible assets consisted of
$3,257 of capitalized design costs relating to logo's for the Company's
principal product and $4,130 of legal fees and other costs related to trademark
registration. The Company will amortize the logo costs over a period of
thirty-six months beginning in the month the Company realizes its first sale and
the trademark costs over the legal life of the trademark when awarded.
Note F. Stock Based Compensation
------------------------
As disclosed in Note A to the financial statements, the Company has adopted the
provisions of SFAS No.148, "Accounting for Stock Based Compensation- Transition
and Disclosure", which requires that stock awards granted subsequent to January
1995 be recognized as compensation expense based on the fair value at the date
of the grant. During the year 2004, the Company incurred additional compensation
expense in the amount of $4,275 to consultants for shares issued or to be issued
in exchange for services. The Board of Directors determined that the fair value
of the Company's shares to be $.01 per share.
Note G. Income Taxes
------------
The Company is a development stage company and has reported losses in each year
since inception. Accordingly, net deferred tax assets primarily attributable to
net operating loss carry forwards have been reduced to zero as a result of a
100% valuation allowance based upon the uncertainty regarding realization of
such tax benefits given the Company's losses.
The tax benefits relating to these net operating losses expire 20 years after
realizing such losses. The Company has approximately $1,050,000 of net operating
losses expiring during various years beginning in 2017.
Note H. Commitments and Contingencies
-----------------------------
During the year 1999, the Company created the 1999 Stock Option Plan (Plan) to
attract and retain the best qualified personnel. Under the Plan, the Company
reserved 3,300,000 shares of its common stock to be given to employees and
independent contractors as additional compensation as determined by the Board of
Directors. The options under the Plan are intended to qualify as Incentive Stock
Options (ISO's) under Section 422 of The Internal Revenue Code.
12
OMNIMED INTERNATIONAL, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
(continued)
Note H. Commitments and Contingencies (cont'd)
--------------------------------------
At December 31, 2004, the Company had granted options to purchase 150,000 shares
of the Company's stock to three key employees.
The Company has employment agreements with five key employees that specify total
minimum annual salaries of $180,000. One of these employees is the Company's
principal shareholder and founder. Several of the employees did not receive the
minimum salary as provided for in their agreements and have waived their right
to receive the unpaid salary.
In connection with these employment agreements, the Company is going to issue
1,190,000 shares of its stock to four key employees as an additional incentive
to commit to employment with the Company. At December 31, 2004, 427,500 of these
shares were vested but not issued. These shares will be issued during 2005.
The Company is obligated under a lease for office space in New Jersey commencing
November 2003 and expiring in October 2008. The lease also provides for
additional rent for increases in operating expenses. Future minimum rent
payments under the lease are:
Year Ended
December 31,
------------
2005 $18,157
2006 19,395
2007 20,633
2008 18,054
Note I. Related Party Transactions
--------------------------
As previously described in the financial statements, the Company has not
generated any operating revenues. The Company has been able to continue
operations due to the payment of company obligations by one of its principal
stockholders as an additional contribution to capital. This stockholder made
payments aggregating $236,929 during the year 2004 and $183,810 during the year
2003 on behalf of the Company.
Note J. Subsequent Events
-----------------
In February 2005, the Company entered into an employment agreement with an
individual to serve as Vice President of Digital Imaging. The agreement provides
for the employee to receive 40,000 shares of the Company's stock upon execution
of the agreement and an additional 60,000 shares vesting 2,500 shares per month
for 24 months. The agreement also provides the employee with options to purchase
an additional 50,000 shares of the Company's common stock.
13
OMNIMED INTERNATIONAL, INC.
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
December 31, 2004
(continued)
Note J. Subsequent Events (cont'd)
--------------------------
In March 2005, the Company entered into an employment agreement with one of the
sons of the company's founder to serve as Vice President of Sales and New
Business Development. The employment agreement provides for the employee to
receive 300,000 shares of the Company's stock upon execution of the agreement
and an additional 600,000 shares vesting 20,000 shares per month for 24 months
and 120,000 shares upon completion of the twenty-fourth month of employment. The
agreement also provides the employee with options to purchase an additional
50,000 shares of the Company's common stock.
14
INDEX TO PRO FORMA FINANCIAL STATEMENTS
Pro forma Consolidated Balance Sheet.........................................F-2
Pro forma Consolidated Statements of Operations..............................F-3
Notes to Pro forma Consolidated Financial Statement.........................F-4
F-1
OMNIMED INTERNATIONAL, INC.
Pro forma Consolidated Balance Sheet
June 30, 2005
(Unaudited)
Omnimed Bio-Solutions
International International, Proforma
Inc. Inc. Adjustments Proforma
--------------- -------------- ---------------- ----------------
ASSETS
CURRENT ASSETS
Cash $82,577 $45,000 a)(45,000) $82,577
Prepaid expenses and other current assets 1,625 0 1,625
--------------- ------------- ----------------
Total current assets 84,202 45,000 84,202
--------------- -------------- ----------------
PROPERTY, PLANT AND EQUIPMENT
(Net of accumulated depreciation) 86,947 0 86,947
--------------- -------------- ----------------
Total property, plant and equipment 86,947 0 86,947
--------------- -------------- ----------------
OTHER ASSETS
Investment in subsidiaries 0 0 c)2,274,420
d)(2,274,420) 0
Capitalized software (net of accumulated 105,010 105,010
amortization)
Other 11,884 0 11,884
--------------- -------------- ----------------
Total other assets 116,894 0 116,894
--------------- -------------- ----------------
Total Assets $288,043 $45,000 $288,043
=============== ============== ================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $21,223 $0 $21,223
Accrued interest 0 198,570 b)(198,570) 0
Short-term notes payable 0 404,997 b)(404,997) 0
-------------- --------------- ----------------
Total current liabilities 21,223 603,567 21,223
-------------- --------------- ----------------
LONG-TERM DEBT
Long-term note payable - related party 323,528 0 323,528
-------------- --------------- ----------------
Total long-term debt 323,528 0 323,528
-------------- --------------- ----------------
Total Liabilities 344,751 603,567 344,751
-------------- --------------- ----------------
STOCKHOLDERS' EQUITY
Preferred stock, n/a and $0.001 par value; n/a and
1,000,000 n/a 0 0
shares authorized; n/a and 0 issued and
outstanding
Common stock, $0.001 and $0.001 par value;
50,000,000,
and 100,000,000 shares authorized; 49,255,000,
and 520,694 shares issued and outstanding 49,256 52 b)150
c)1,000
d)(49,256) 1,202
Additional paid-in capital 1,189,627 1,772,509 b)603,417
c)(1,093,545)
d)(1,189,627) 1,282,381
Accumulated deficit (1,295,291) (2,331,128) a)(45,000)
d)2,331,128 (1,340,291)
-------------- --------------- ----------------
Total stockholders' equity (56,408) (558,567) (56,708)
-------------- --------------- ----------------
Total Liabilities and Stockholders' Equity $288,343 $45,000 $288,043
============== =============== ================
The accompanying notes are an integral part of the pro-forma financial statements
F-2
OMNIMED INTERNATIONAL, INC.
Pro forma Consolidated Statements of Operations
(Unaudited)
Six months ended June 30, 2005
Omnimed Bio-Solutions Pro forma
International International, Adjustments Pro forma
Inc. Inc.
---------------- --------------- -------------- ---------------
REVENUES
Sales $0 $0 $0
---------------- --------------- ---------------
Total revenues 0 0 0
COST OF SALES
Cost of sales 0 0 0
---------------- --------------- ---------------
Gross margin 0 0 0
---------------- --------------- ---------------
OPERATING EXPENSES
General and administrative 236,629 0 a)45,000 281,629
Depreciation 27,049 0 27,049
---------------- --------------- ---------------
Total operating expenses 263,678 0 308,678
---------------- --------------- ---------------
Operating loss (263,678) 0 (308,678)
---------------- --------------- ---------------
OTHER INCOME (EXPENSE)
Interest income 0 0 0
Other income (expense) 247 0 247
Interest expense 0 0 0
---------------- --------------- ---------------
Total other income (expense) 247 0 247
---------------- --------------- ---------------
Net income (loss) $(263,431) $0 $(308,431)
================ =============== ===============
The accompanying notes are an integral part of the pro-forma financial statements
F-3
OMNIMED INTERNATIONAL, INC.
Notes to Pro forma Consolidated Financial Statements
(Unaudited)
(1) Pro forma Changes
On September , 2005, the Company entered into a Share Exchange
Agreement with Omnimed International, Inc., (OII), a Nevada company.
This business combination was a reverse merger, accounted for as a
recapitalization of OII. The Company issued 10,000,000 shares of
common stock of the Company to complete this acquisition.
The Pro forma statement of operations includes the months ended March
31, 2005 for the Company, OTCW and CEOC.
(2) Pro forma Adjustments
a) $45,000 cash paid for expenses related to the merger.
b) 1,500,000 shares of common stock of the Company was issued to
settle the then outstanding convertible debt and accrued interest
of BSOU.
c) 10,000,000 shares of common stock of the Company was issued in
exchange for 100% of the issued and outstanding common stock of
Omnimed.
Consolidation:
--------------
b) Eliminate investment in subsidiaries, the Company's retained
deficit and common stock of subsidiaries.
F-4
INDEX TO PRO FORMA FINANCIAL STATEMENTS
Pro forma Consolidated Statements of Operations.............................F-6
Notes to Pro forma Consolidated Financial Statement........................F-7
F-5
OMNIMED INTERNATIONAL, INC.
Pro forma Consolidated Statements of Operations
(Unaudited)
Year Ended
Omnimed Bio-Solutions
International International, Pro forma
Inc. Inc. Adjustments Pro forma
------------------ ---------------- -------------- -------------------
REVENUES December 31, 2004 June 30, 2004
------------------ ----------------
Sales $0 $ 0 $ 0
------------------ ---------------- -------------------
Total revenues 0 0 0
COST OF SALES
Cost of sales 0 0 0
------------------ ---------------- -------------------
Gross margin 0 0 0
------------------ ---------------- -------------------
OPERATING EXPENSES
General and administrative 275,441 22,000 297,441
Depreciation 45,268 0 45,268
------------------ ---------------- -------------------
Total operating expenses 320,709 22,000 342,709
------------------ ---------------- -------------------
Operating loss (320,709) (22,000) (342,709)
------------------ ---------------- -------------------
OTHER INCOME (EXPENSE)
Dividend income 290 0 290
Interest expense 0 (40,500) (40,500)
Realized loss on sale of securities (79,891) 0 (79,891)
------------------ ---------------- -------------------
Total other income (expense) (79,601) (40,500) (120,101)
------------------ ---------------- -------------------
Net income (loss) $(400,310) $(62,500) $(462,810)
================== ================ ===================
The accompanying notes are an integral part of the pro-forma financial statements
F-6
OMNIMED INTERNATIONAL, INC.
Notes to Pro forma Consolidated Financial Statements
(Unaudited)
(1) Pro forma Changes
On September , 2005, the Company entered into a Share Exchange
Agreement with Omnimed International, Inc., (OII), a Nevada company.
This business combination was a reverse merger, accounted for as a
recapitalization of OII. The Company issued 10,000,000 shares of
common stock of the Company to complete this acquisition.
The Pro forma statement of operations includes the months ended March
31, 2005 for the Company, OTCW and CEOC.
(2) Pro forma Adjustments
a) $45,000 cash paid for expenses related to the merger.
b) 1,500,000 shares of common stock of the Company was issued to settle
the then outstanding convertible debt and accrued interest of BSOU.
c) 10,000,000 shares of common stock of the Company was issued in
exchange for 100% of the issued and outstanding common stock of
Omnimed.
Consolidation:
--------------
b) Eliminate investment in subsidiaries, the Company's retained deficit
and common stock of subsidiaries.
F-7