As filed with the Securities and Exchange Commission on
November 28, 2001 Registration No. 333-46666
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO THE FORM SB-2 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
BIOQUEST INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Virginia 7375 54-1965777
- -------- ---- ----------
(Primary Standard (Primary Standard (IRS Employer
Industrial Classification Industrial Classification Identification
("SIC") Number) ("SIC") Number) Number)
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11217 Silverleaf Drive
Fairfax Station, Virginia 22039
(703) 764-4464
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive office)
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Copy To:
Carl N. Duncan, Esq.
5718 Tanglewood Drive
Bethesda, Maryland 20817
(301) 263-0200
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of the Registration Statement
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: [x].
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until Registrant shall file an
amendment which specifically states that the Registration Statement shall
thereafter become effective in accordance with Section 8 (a) of the Securities
Act of 1933 or until the Registration Statement shall become effective on such
date as the Securities and Exchange Commission, acting pursuant to said Section
8(a), may determine.
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PROSPECTUS
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1,000,000 Shares of Common Stock
($10,000,000 if Sold at $10.00 per Share
and $14,000,000 if Sold at $14.00 per Share)
BIOQUEST INTERNATIONAL, INC.
BioQuest International, Inc. is making this offering of 1,000,000 of
its shares of common stock on a best-efforts, self-underwritten, Dutch Auction,
all-or-nothing basis.
During this offering, shares are being offered at $10.00 per share
minimum but, because of the Dutch Auction process being employed, purchasers may
pay a price of up to $14.00 per share.
If a minimum of 1,000,000 of shares is not sold during this offering
(up to 120 days from the date of this prospectus), investor funds relating to
the shares will be promptly returned without interest.
These are speculative securities. You should purchase these securities
only if you can afford a complete loss of your investment. See "Risk Factors"
and "Absence of Public Market" for certain factors that should be considered by
prospective investors, including risks relating to our current financial
condition and there is currently no market for the shares.
These securities have not been approved or disapproved by the
Securities and Exchange Commission or any state securities commission nor has
the Securities and Exchange Commission or any state securities commission passed
upon the accuracy or adequacy of this prospectus. Any representation to the
contrary is a criminal offense.
================================================================================
The date of this Prospectus is November 9, 2001
================================================================================
REGULATORY DISCLOSURES
Bids for shares offered hereby are subject to the following conditions:
(1) No one investor, or persons acting in concert, may purchase more than
100,000 shares.
(2) Except as required in specific states (see (3) below), there is no
across-the-board suitability standard because, among other reasons, the
minimum investment is so small (one share at a $10 - $14 bid).
(3) Shares are being qualified for sale in certain states. Once registered,
bids only from those states will be deemed valid.
(4) For a current list of states and, where required, any associated
suitability requirements. For example, while most states have
significantly lower or no suitability standards, New Jersey residents
must be "accredited" as defined. See "Dutch Auction Bid Process Website
-- Welcome," Appendix II in the hard copy and the "Tutorial" on the
website.
(5) It is our goal to encourage prudent investing and we want every bidder
to carefully evaluate our company so that they can make educated bids.
You must access the prospectus and then check the box at the end of
this prospectus signifying that you have had access to the prospectus.
Only then will you be granted access to the bidding pages.
[Balance of page intentionally left blank]
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TABLE OF CONTENTS
Descriptive Title Page
REGULATORY DISCLOSURES.........................................................2
PROSPECTUS SUMMARY.............................................................4
RISK FACTORS...................................................................4
CERTAIN PARTIES AND RELATED TRANSACTIONS.......................................8
APPLICATION OF PROCEEDS.......................................................10
CAPITALIZATION................................................................12
DILUTION......................................................................12
THE COMPANY...................................................................14
FIDUCIARY RESPONSIBILITY OF THE COMPANY'S MANAGEMENT..........................36
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND THE PRINCIPAL SHAREHOLDERS.......................................36
SELECTED FINANCIAL DATA.......................................................37
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS............................................37
ABSENCE OF PUBLIC MARKET......................................................38
DESCRIPTION OF CAPITAL STOCK..................................................38
PLAN OF DISTRIBUTION..........................................................39
ERISA CONSIDERATIONS..........................................................43
EXPERTS.......................................................................44
AVAILABLE INFORMATION.........................................................44
APPENDIX I - FINANCIAL STATEMENTS............................................I-1
APPENDIX II - DUTCH AUCTION BID PROCESS WEBSITE.............................II-1
No person is authorized to give any information not contained in the prospectus
in connection with this offering and, if given or made, such information or
representation must not be relied upon as having been authorized. This
prospectus does not constitute an offer by any person within any jurisdiction to
any person to whom such offer would be unlawful.
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PROSPECTUS SUMMARY
Prospective investors are encouraged to review this prospectus in its
entirety, including the risk factors and financial statements.
The Company
BioQuest International, Inc., organized November 4, 1999 under the laws
of Virginia, is a development stage company created to design, build and operate
a comprehensive Internet portal and allied companies focused on
alternative/complementary/integrated medicine. Specifically, we act as a holding
corporation for the purposes of creating, establishing, acquiring, building and
developing various wholly owned subsidiary companies, all allied within the
alternative/complementary/integrative medical field. Our business address is
11217 Silverleaf Drive, Fairfax Station, Virginia; our telephone number is (703)
764-4464.
We are a developmental stage company without any operations or revenues
to date. Our shares are not currently listed on any exchange or market. However,
upon successful conclusion of this offering, as discussed in "Absence of Public
Market," we intend to seek qualification of our shares for quotation, initially
on the NASDAQ Bulletin Board. Nonetheless, our auditors have expressed
substantial doubt as to our ability to continue as a going concern unless this
offering is successful. Our founders, directors and officers, following the
offering, will together own 84.7% of our shares if the 1,000,000 share offering
is sold.
The Offering
Plan of The shares are being offered on a best efforts,
Distribution self-underwritten, all-or-nothing, Dutch Auction
basis. Specifically, during this offering, all
1,000,000 shares being offered must be sold. The
minimum acceptable bid during this offering is $10.00
but, because of the Dutch Auction process being
employed, purchasers may pay a price of up to $14.00
per share. Because shares are being sold by its
principals, Peter J. Ewens and Roger Miller, on a
self-underwritten basis (without the use of
broker-dealers), there is no selling commission. For
details, see Appendix II, Dutch Auction Bid Process
Website, and www.bioquestipo.com.
Risks and Conflicts An investment in BioQuest involves substantial
of Interest risks due in part to the highly speculative nature of
our business plan and risks related to our current
financial condition. You should purchase these
securities only if you can afford a complete loss of
your investment. Risks and conflicts inherent in
investing in BioQuest, respectively, are discussed
under "Risk Factors" and "Certain Parties and Related
Transactions."
Application of The proceeds of the offering are expected to be
Proceeds employed as outlined in "Application of Proceeds,"
with particular emphasis on completing the
construction of our Internet portal,
BatOutOfHealth.com, and implementing Stage I of the
BioQuest Centre for Natural and Integrative Medicine.
As described in "Application of Proceeds", "The
Company" and "Plan of Distribution," in the event
that a clearing price greater than the $10.00 per
share minimum is realized, we intend to apply more
capital toward implementing our business plan.
RISK FACTORS
Prospective investors should consider carefully, in addition to the
other information contained in this prospectus, the following factors before
purchasing the shares offered hereby. We are a very early stage development
company. Investors should carefully consider the information presented,
including risks relating to the absence of operations, uncertain market
acceptance, competition, potential technical obsolescence, future capital needs
and dependence on key personnel.
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Risks Related to Our Current Financial Condition
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OUR ABILITY TO CONTINUE AS A GOING CONCERN DEPENDS ON THIS OFFERING BEING
SUCCESSFUL. The independent auditors' report on our June 30, 2001 financial
statements (see Appendix I) notes that we are a developmental stage company,
have not generated any revenues to date and have sustained losses since our
inception that raise substantial doubt about our ability to continue as a going
concern. For example, on that date, we had an accumulated deficit of $1,232,229,
had no revenues and funded our operations through the sale of our securities.
Our ability to continue as a going concern depends on our successful completion
of this offering and our ability to generate sufficient revenue from future
operations. If we do not satisfy these two conditions, then we will need to
dissolve the company.
NO OPERATING HISTORY ON WHICH TO BASE OUR PROPOSED PLANS. We were only recently
founded and plan to commence operations in September 2001. (See "The Company.")
Since our inception, most of our time and resources have been spent in obtaining
interim financing and developing a business plan. Accordingly, we have no
meaningful operating history upon which an evaluation of our prospects can be
based. To address these risks, we must, among other things, respond to
competitive developments as well as attract, retain and motivate qualified
persons. Moreover, we have incurred normal start-up expenses since inception and
expect to operate at a loss for the foreseeable future. At anticipated levels of
capital expenditures (so-called "burn rates"), proceeds from the minimum
offering are expected to fund our operations for not less than 12 months.
Nonetheless, there can be no assurance that we will achieve or sustain
profitability.
NO ASSURANCE WE WILL ACHIEVE PROFITABILITY OR PAY DIVIDENDS. We have not paid
any dividends. There can be no assurance that our products and services will be
accepted in the marketplace or that there will be sufficient revenues generated
for us to be profitable. If we cannot maintain a reasonable profit margin, we
may be forced to discontinue operations. Should our operations and proposed
expansion prove to be profitable, it is likely that we will retain much or all
of our earnings in order to finance future expansion. Moreover, we may be
restricted from paying dividends to our shareholders under future credit or
other financing agreement(s). Therefore, we do not presently intend to pay
dividends, and it is not likely that any dividends will be paid in the
foreseeable future.
WE MAY HAVE CONTINGENT SECTION 5 LIABILITY ARISING IN CONNECTION WITH A PRIOR
MAGAZINE ADVERTISEMENT. A magazine advertisement that ran in September 2001
announcing this offering omitted a legend required by specific SEC regulation
when not yet registered as we had expected. We otherwise believe the ad was in
customary form. If the ad were determined to have constituted a prospectus that
did not meet the requirements of Section 5 of the Securities Act, then any
purchasers in this offering who viewed this ad could have the right, for a
period of one year form the date of their purchase, to bring an action for
rescission or for damages resulting from their purchase of our common stock. We
do not believe that the existence of this advertisement (or the omission of the
legend) caused a violation of the Securities Act. Moreover, we did not receive
any responses to the ad and, in fact, will not use any responses which might
have come from this ad.
Risks Related to This Offering
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AMOUNT OF PROCEEDS FROM THIS OFFERING DEPENDENT UPON OUTCOME OF THE DUTCH
AUCTION PROCESS. The amounts set forth in the "Application of Proceeds" section
indicates our proposed use of proceeds from this offering. At least as
critically, the Dutch Auction nature of this offering leaves the proceeds a
function of the outcome of the auction itself. Specifically, the gross proceeds
could be as low as $10,000,000 and as high as $14,000,000. A significant portion
of the net proceeds of this offering, after organization and offering expenses,
has been allocated, among other uses, to investment in existing subsidiaries and
proposed acquisitions. While we expect to use proceeds of this offering as
outlined in "Application of Proceeds," we retain broad discretion as to the
specific use of such funds. For example, as described in such discussion, if
shares are sold at $10.00 per share, $2,500,000 of the $10,000,000 raised (25%)
are expected to be used for BatOutOfHealth.com but the dollar amount increases
to $3,600,000 of the $14,000,000 (25.7%) if the shares in this 1,000,000 share
Dutch Auction offering are sold at the $14.00 maximum bid.
FLEXIBILITY IN ALLOCATING NET PROCEEDS. We have considerable discretion
flexibility (see "Application of Proceeds" and preceding paragraph) in using a
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substantial portion of the proceeds raised by this offering to purchase
unspecified businesses or to make unspecified acquisitions. There is no
assurance we will be able to successfully acquire or merge with these
organizations that are favorable to us but such acquisitions are expected to be
15% or less if $10,000,000 is raised, reducing to about 14.29% if the
$14,000,000 maximum offering is achieved.
THIS OFFERING IS SELF-UNDERWRITTEN, A PLAN OF DISTRIBUTION DIFFERING FROM
TRADITIONAL PLANS. We plan to use a "Dutch Auction" as the primary method of
distributing our shares as described in "Plan of Distribution". We will solicit
offers to purchase from prospective investors through the Internet as well as by
traditional means. The auction is open for purposes of receiving offers to
purchase, pursuant to this final prospectus, whether via hard copy or on our
website which is located at www.bioquestipo.com. This method of distribution has
the inherent risk that we will not sell the desired amount of securities or
receive the desired price for those securities. If this were to occur, we would
likely postpone or cancel the offering which could materially affect any future
attempts to sell our shares in a public offering.
DISTRIBUTION OF OUR SHARES WITHOUT AN UNDERWRITER COULD RESULT IN A POOR
AFTER-MARKET FOR OUR SHARES. Because we are not using a traditional underwriter
for this offering (see "Plan of distribution") there may be a greater risk that
our common shares will not receive adequate support from securities firms in the
after-market, through market-making and other activities. If this should occur,
the market price for our common shares may decline.
ARBITRARY OFFERING PRICE OF SHARES. Our minimum price per share has been
arbitrarily determined by our board of directors and bears no relationship to
our assets, book value or net worth. (See "Dilution")
IMMEDIATE AND SUBSTANTIAL DILUTION OF BOOK VALUE PER COMMON SHARE. This offering
will result in immediate and substantial dilution, meaning that investors will
pay a price per share that substantially exceeds the value of our assets after
subtracting our liabilities, or net tangible book value. Very specifically, as
described in "Dilution," the investors in this offering will contribute, at
$10.00 per share, $10,000,000 or 86.3% of the funding to date but own only 10.0%
of the shares outstanding (or, at $14.00 per share, contribute $14,000,000 or
89.8% of funding to date and own 10.0% of the shares outstanding). Said another
way, investors will experience, at the $10,00 bid price, a $90.3% dilution to a
$0.97 net tangible book value (and at the $14.00 bid price, a 90.2% dilution to
a $1.37 net tangible book value).
NO ASSURANCE AN ACTIVE PUBLIC MARKET WILL DEVELOP; SHAREHOLDERS MAY NOT BE ABLE
TO LIQUIDATE SHARES. No trading market for the purchase and sale of these shares
currently exists. ( See "Securities Ownership of Certain Beneficial Owners and
the Principal Shareholders" and "Certain Parties and Related Transactions").
While we will become a reporting company as a result of this offering and expect
to be qualified for quotation, initially on the NASDAQ Bulletin Board within
about two weeks of closing on this offering, no assurance can be given as to
getting listed or the liquidity of the trading market for our shares or that an
active public market will develop or, if developed, will continue. If an active
public market does not develop or is not maintained, the market price and
liquidity of the shares may be adversely affected. Consequently, holders of
shares acquired in this offering may not be able to liquidate their investment
in the event of an emergency or for any other reason.
MANAGEMENT CONTROL, CONFLICTS AND PRIOR BANKRUPTCY OF A COMPANY ASSOCIATED WITH
TWO OF OUR PRINCIPALS MAY BE ADVERSE TO OTHER SHAREHOLDERS' INTERESTS. Upon
consummation of the offering, members of our management will beneficially own
84.7% of the outstanding shares. As a result of this ownership, management will
have significant influence over our management policies and corporate affairs.
In fact, investors who purchase shares may not have the power to elect even a
single director and, as a practical matter, current management will continue to
control BioQuest. Concentration of large amounts of our shares in the hands of
management may also make more difficult any takeover or change in control not
approved by such shareholders. Such potential conflict may extend to
relationships with the Company. (See also "No Asset Purchase Agreements" below.)
For example, Dr. Chappell, a principal in BioQuest, has an existing business
selling herbal products prior to joining BioQuest. Once the offering has been
successfully concluded, Dr. Chappell will devote 100% of his time to BioQuest
per his Employment Agreement, and his herbal products will then be marketed,
sold and distributed by BioQuest and under the BioQuest label. Finally, as
discussed in "The Company - Litigation/Mandated Disclosure," Messrs. Ewens and
Miller were principals of AA Group, Inc. doing business as Amorous Andi's which
entity declared bankruptcy in May 2000.
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NO ASSET PURCHASE AGREEMENTS. There are no asset purchase agreements for (i) Dr.
Chappell's Sacred Native Herbs and Natural Healing product line, his tapes,
videos, books and other educational items; (ii) Ms. Shoong's monthly
publication, The California Sun; and (iii) The Shoong & Chappell Radio Show.
While the employment agreements with Dr. Chappell and Ms. Shoong do not disclose
the terms and purchase price of these assets, they will transfer these assets
and the goodwill relating to the business without additional consideration from
BioQuest.
NO INDEPENDENT DIRECTORS. Initially, there are no independent directors, with
our only directors being Peter Ewens (who is President/CEO) and Roger Miller
(who is the CFO/Treasurer/Secretary). And therefore no independent Audit and
Compensation Committees exist. Concurrent with closing on the Dutch Auction,
outside directors will be appointed to the Board. These independent directors
will determine that any proposed, on-going, affiliated transactions or loans
will be on terms no less favorable to us than could be obtained from
unaffiliated third parties and will have access, at our expense, to either our
counsel or independent legal counsel.
UNREGULATED STATUS; INSURABILITY. The Centre for Integrative Medicine and the
treatments offered will not be licensed or regulated by any U.S. city, state
and/or federal government. Nonetheless, our facilities and company will be
insured against personal lawsuits, injury or death of its patients, including
liabilities associated with any misdiagnosis, mistreatments and overdoses of
certain holistic treatments which may be lethal if taken with certain
prescriptions.
UNPROVEN ACCEPTANCE OF OUR PRODUCTS AND SERVICES. We do not currently have
alternative medical products or services, as described in "The Company," and
therefore we do not know how much, if any, acceptance our future products and
services will receive in the marketplace. Moreover, our market is new and
subject to rapid technological change. As such, the demand and market acceptance
for our products is subject to a high level of uncertainty. We may, therefore,
have difficulty establishing and expanding a domestic and international client
base. If such a client base cannot be created and maintained, we will be forced
to cease business operations.
OUR ANTICIPATED RAPID GROWTH OF THE COMPANY WILL PLACE SIGNIFICANT STRAIN ON
BUSINESS RESOURCES AND VENDORS. The rapid execution necessary for us to fully
exploit the market window for our alternative medicine products and services
requires an effective planning and management process. Our rapid growth is
expected to place a significant strain on our managerial, operational and
financial resources. In addition, basically all our administrative and marketing
and sales staff is yet to be hired. Similarly, the development and
implementation of our business plan is placing, and will continue to place, a
significant demand on our vendors. In addition, certain of our suppliers will
rely on the limited components included in their products. Although we believe
that we have made adequate allowances for the costs and risks associated with
this expansion, there can be no assurance that our systems, procedures or
controls will be adequate to support our operations or that management will be
able to achieve the rapid execution necessary to fully exploit the market window
for our products and services. If we are unable to manage growth effectively,
our operating results and financial condition will be adversely affected.
UNCERTAINTIES REGARDING FUTURE INCREASE IN U.S. AND INTERNATIONAL GOVERNMENT
REGULATION. We are not currently subject to direct regulation by any government
agency, other than regulations applicable to businesses generally and there are
currently few laws or regulations directly applicable to our products. However,
it is possible that a number of laws and regulations may be adopted with respect
to alternative medicine and international commerce. These possible regulations
could cover issues such as nutritional supplements being regulated by the Food
and Drug Administration (F.D.A.) in the future. The adoption of any such laws or
regulations could decrease the demand for our products and increase our cost of
doing business or otherwise have an adverse effect on our business. Moreover,
there can be no assurance that export controls, either in their current form or
as may be subsequently enacted in the U.S., Mexico, the Caribbean or elsewhere,
will not limit our ability to distribute products - and possibly services -
outside of the United States. Any such export restrictions, new legislation or
regulation or unlawful exportation could have an adverse impact on our business
operation.
NO CURRENT EMPLOYEES; POTENTIAL INABILITY TO ATTRACT AND RETAIN QUALIFIED
PERSONNEL. At present, our performance is entirely dependent on the performance
of our executive officers. The loss of the services of any of these executive
officers could have a material adverse effect on our business. Currently, as
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described in "The Company," we have no employees. In fact, we will not have
employees unless this offering is successful. We are dependent on our ability to
attract, retain and motivate high quality personnel, especially management and
highly skilled alternative medicine professionals. Since the pool of available
talent is relative restricted and/or concentrated in certain geographical areas,
competition for such personnel is intense and there can be no assurance that we
will be able to attract, assimilate or retain highly qualified technical and
managerial personnel. The inability to attract and retain qualified alternative
medicine professionals could have a significantly adverse effect upon our
ability to maintain business operations.
UNAUTHORIZED USE OF OUR MEDICAL TECHNOLOGY AND PROTOCOLS POSSIBLE. Our success
and ability to compete is dependent, in part, upon our proprietary medical
technology and protocols. Because we have no patents, we will rely on trademark,
trade secret and copyright law to protect our licensed technology and medical
protocols. Despite our efforts to protect our proprietary rights, unauthorized
parties may attempt to copy aspects of our medical products and services,
including our protocols, or to obtain and use information that we regard as
proprietary. We will generally enter into confidentiality or license agreements
with our employees, consultants and vendors, as well as control access to and
distribution of our documentation and other proprietary information.
Nonetheless, there can be no assurance that the steps we take will prevent
misappropriation of our medical technology or that such agreements will be
enforceable.
NO EXPERIENCE IN GAINING ENTRY INTO OR SERVICING INTERNATIONAL MARKETS. A key
component of our strategy is our planned expansion into international markets.
In particular, we intend to establish a medical facility in the Caribbean by the
end of 2001. To date, we have no experience in developing localized versions of
our alternative medicine products and services or marketing and distributing
these products and services internationally. If the international revenues
generated by these alternative medicine products/services are not adequate to
offset the expense of establishing and maintaining these foreign operations, our
business, operating results or financial condition could be materially adversely
affected. There can be no assurance that we will be able to successfully market,
sell and deliver in these markets.
CERTAIN PARTIES AND RELATED TRANSACTIONS
Because of certain statutory and case law relating to broad discretion
granted management of a company, typically directors and officers of a
corporation are indemnified by and have limited monetary liability to its
shareholders. Failure of management to satisfy its fiduciary responsibility to
shareholders could subject management to certain claims.
On January 1, 2000, we issued 4,000,000 shares of restricted common
stock to Mr. Peter J. Ewens, our Chairman, Chief Executive Officer and record
and beneficial owner of approximately 44.2% of our outstanding shares, in
consideration and exchange for $21,000.
On January 1, 2000, Registrant issued 4,000,000 shares of restricted
common stock to Mr. Roger Miller, Secretary, Treasurer and record and beneficial
owner of approximately 44.2% of Registrant's outstanding common stock, in
consideration and exchange for $21,000.
On January 1, 2001 Registrant issued 250,000 shares of restricted
common stock to Mr. James Chappell, our Vice President of Medical and Scientific
Technology and record and beneficial owner of approximately 2.8% of Registrant's
outstanding shares, in consideration for services rendered.
On January 1, 2001 Registrant issued 250,000 shares of restricted
common stock to Ms. Nicole Shoong, our President of BioQuest Media Resources
Group and record and beneficial owner of approximately 2.8% of Registrant's
outstanding shares, in consideration for services rendered.
Under an oral agreement with the Board of Directors, we paid consulting
fees to Peter Ewens, our Chief Executive Officer, totaling $106,080 from
inception, November 4, 1999, through October 15, 2000. As the founder of the
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company, Mr. Ewens agreed to devote 100% of his time to establishing, developing
and building BioQuest, in addition to working in conjunction with securities
counsel to complete the public offering. Since October 15, 2000, we have
discontinued the payment of consulting fees, instead paying Mr. Ewens under the
employment agreement described in the following paragraph.
It should be noted that the amount of these fees were less than what is
dictated by the current market in bringing a consultant in to perform the tasks
and undertake the responsibilities which Mr. Ewens has. As of October 15, 2000,
all four officers of the corporation, including Mr. Ewens, entered into
employment agreements as described in "Executive Compensation and Employment
Contracts."
Roger Miller, the Chief Financial Officer, is also a partner in the
consulting firm of Miller & Associates, Inc. during the period, Miller &
Associates, Inc. incurred expenses for supplies and other office related
functions for us. We reimbursed Miller & Associates, Inc. for all expenses
incurred on our behalf, totaling $13,073.
Mr. Ewens is providing rent-free space to us, pending the conclusion of
this offer (when it will obtain necessary facilities from a non-affiliated
person or entity).
We believe, except with regard to the shares issued to our principals,
that such terms were as favorable to us or our affiliates as those generally
available from unaffiliated third parties. For transactions that were entered
into when there were less than two such disinterested independent directors, we
lacked sufficient disinterested independent directors to ratify the transactions
at the time the transactions were initiated (but Virginia, where we are
organized, does not require).
Finally, as of June 30, 2001, there exists receivables from
shareholders aggregating $3,455. In the course of performing our mid-year audit,
it was noted that certain personal expenses ($600 with regard to Mr. Ewens and
$2,855 with regard to Mr. Miller) were inadvertently paid by the company. These
amounts will be repaid by Messrs. Ewens and Miller on or before the break of
escrow as to this offering.
Other than the foregoing, there have been no past transactions between
BioQuest and its affiliates. Nonetheless, Peter J. Ewens, and Roger Miller have
had a personal and business relationship for nearly 25 years. Mr. Miller has
been Mr. Ewens' personal tax advisor and Mr. Ewens and Mr. Miller have had
majority ownership in two other corporations previously. Mr. Ewens and Mr.
Miller have also made personal investments in the same investment opportunities
together, in each case as minority shareholders. No other prior relationships
exist within our management.
Our securities counsel, Duncan, Blum & Associates, is being paid for
services rendered through significantly reduced cash compensation and the
issuance of warrants to exercise the purchase of 15,000 shares at $.01 per share
for up to three years from the date of this prospectus.
We may enter into transactions with our affiliates in the future.
BioQuest intends to enter into any such transactions only at prices and on terms
no less favorable to BioQuest than transactions with independent third parties.
In that context, BioQuest will require any director or officer who has a
pecuniary interest in a matter being considered to recluse themselves from any
negotiations. Specifically, our Articles of Incorporation provide that any
related party contract or transaction must be authorized, approved or ratified
at a meeting of the Board of Directors by sufficient vote thereon by independent
directors.
For these purposes, an independent director is a member of our board of
directors who is not an officer, employee or promoter of the company, our
subsidiaries or our affiliates or associates and has not been an officer or
employee of such persons or entities within the last two years and does not have
a material business or professional relationship with such persons or entities.
(A business or professional relationship is material if it exceeds 5% of the
independent director's annual gross revenue, derived from all sources during
either of the last two years, or net worth, on a fair market value basis).
Moreover, any BioQuest debt instruments in the future are expected generally to
prohibit us from entering into any such affiliate transaction on other than
arm's-length terms. In addition, at the break of escrow for this offering or
earlier, a majority of the Board will be required to be (and must continue to
be) comprised of independent directors. In turn, commencing immediately, all
future material affiliated transactions and loans will be made or entered into
on terms that are no less favorable to us than those that can be obtained from
unaffiliated third parties. In addition, all future material affiliated
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transactions and loans (and any forgiveness of loans) must be approved by a
majority of our independent directors who do not have an interest in the
transactions and who have access, at our expense, to the company's or
independent legal counsel.
APPLICATION OF PROCEEDS
The net proceeds from the sale of our shares of common stock offered
hereby, after associated organization and offering expenses, are estimated to be
$9,346,000 if sold at the $10.00 minimum bid price per share and $13,346,000 if
sold at the $14.00 maximum bid price per share. See "Capitalization" below with
regard to our current capitalization and that which will exist if this 1,000,000
share offering is achieved.
We expect that not less than 85% of the proceeds will be used to
finance the development and expansion of our contemplated activities as well as
for general corporate purposes. In the event only the minimum amount of funding
is subscribed, we will concentrate our efforts primarily on completing the
construction of our Internet portal, BatOutOfHealth.com, and establishing and
outfitting Stage I of the BioQuest Centre for Natural and Integrative Medicine.
In the event that the "clearing price" on this Dutch Auction is higher than the
$10.00 minimum bid, we intend to be more aggressive in implementing our business
plan and further develop operations, personnel and project. This may include up
to 15% of the proceeds being used to acquire other businesses allied with the
alternative medicine field not carried on by our then-existing subsidiaries. For
example, we anticipate conducting exploratory discussions in the future with
potential strategic partners and/or acquisition candidates in the field of
alternative medicine for our existing subsidiaries. Should any relationships
develop from these discussions, it is anticipated that all such transactions
would involve either an all-stock transfer or payment via a cash component and a
stock component. The figures listed assume all such transactions will be part
cash and part stock and include anticipated due diligence expenses.
Anticipated application of proceeds below does not, however, include
cash flow from revenue. We anticipate receiving revenues from operations, but
there can be no assurance that such revenues will be sufficient to generate
positive cash flow before proceeds from this offering are expended. At
anticipated levels of capital expenditures (so-called "burn rates"), proceeds
from the minimum offering are expected to fund our operations for not less than
12 months. However, investors are advised that, given the Dutch Auction process,
the selling price could be a high as $14.00 a share, which would increase the
net proceeds to BioQuest to as much as approximately $13,346,000.
[Balance of page intentionally left blank.]
-10-
Application of Proceeds
$10,000,000(1) $12,000,000(2) $14,000,000(3)
----------- ----------- -----------
Percentage Percentage Percentage
Dollar Of Gross Dollar Of Gross Dollar Of Gross
Amount Proceeds Amount Proceeds Amount Proceeds
------ -------- ------ -------- ------ --------
Organization and Offering Expenses
Accounting Fees $30,000 0.3% $30,000 0.2% $30,000 0.2%
Legal Fees (4) 35,000 0.4 35,000 0.3 35,000 0.3
Printing and Related Costs 25,000 0.3 25,000 0.2 25,000 0.2
Filing Fees (SEC & State) 34,000 0.4 34,000 0.3 34,000 0.3
Software license Fee for Internet-Based Direct 25,000 0.3 25,000 0.2 25,000 0.2
Public Offering
Complete Web Site for Stage I(5) 45,000 0.5 45,000 0.4 45,000 0.3
Marketing - Internet 230,000 2.3 230,000 1.9 230,000 1.6
Marketing - Non - Internet 230,000 2.3 230,000 1.9 230,000 1.6
Miscellaneous 4,000 0.0 4,000 0.0 4,000 0.0
----- --- ----- --- ----- ---
Subtotal 654,000 6.5 654,000 5.4 654,000 4.7
------- --- ------- --- ------- ---
NET PROCEEDS $9,346,000 93.5 $11,346,000 94.6% $13,346,000 95.3%
========== ==== ========== ===== =========== =====
USE OF NET PROCEEDS
Working Capital(6) (7) $1,346,000 13.5% $1,800,000 15.0% $2,100,000 15.0%
Investment in Activities of Subsidiaries (8) (9)
BatOutOfHealth.com 2,500,000 25.0 3,296,000 27.5 3,600,000 25.7
BioQuest Centre for Natural and Integrative Medicine 1,500,000 15.0 2,050,000 17.1 2,246,000 16.0
BioQuest Media Resources Group 1,500,000 15.0 1,600,000 13.3 1,900,000 13.6
BioQuest Seminar Program 1,000,000 10.0 1,100,000 9.2 1,500,000 10.7
Proposed Acquisitions (10) 1,500,000 15.0 1,500,000 12.5 2,000,000 14.3
--------- ---- --------- ---- --------- ----
SUBTOTAL) $9,346,000 93.5% $11,346,000 94.6% $13,346,000 95.3%
========== ===== =========== ===== =========== =====
(1) This presentation assumes all 1,000,000 shares being offered are sold
at the $10.00 minimum bid.
(2) This presentation assumes all 1,000,000 shares being offered are sold
at the $12.00 mid-range bid.
(3) This presentation assumes all 1,000,000 shares being offered are sold
at the $14.00 maximum bid.
(4) Legal fees represent the cash portion only. Warrants for the issuance
of stock in the amount of 15,000 shares, exercisable at $.01 per share
at any time prior to three years from the date of this prospectus, will
be granted in lieu of the cash balance of legal fees.
(5) A portion of the total cost of the completion of Stage I of BioQuest's
web site will be granted in stock upon completion of Stage I. The
figures listed represent the cash portion only. With regard to Kirk
Cizerle, our BatOutOfHealth.com web designer, the 16,000 shares
represents less than 1/100 of 1% of our shares.
(6) No funds are expected to be raised from other sources to achieve the
purposes stated. No part of the proceeds is to be used to acquire any
property (including goodwill) otherwise than in the ordinary course of
business. Similarly, no part of the proceeds is to be used to acquire
property in the future (since that is not the Company's business)
except possibly for facilities the company will, itself, use in its
business activities No proceeds are expected to be used to pay
indebtedness, including unpaid salaries to affiliates of the Company,
except as addressed in (7) below.
(7) Portions of the proceeds of this offering will be used to pay both
salaries of our management and non-affiliates. The figures listed
-11-
represent amounts for a period of 6 months from the date of this
prospectus. $367,500 of the $1,346,000 allocated to Working Capital, if
$10,000,000 raised at the $10.00 per share minimum bid, will be used
for salaries, representing 27.3% of Working Capital (or 3.6% of the
gross proceeds). $1,000,000 of the $2,100,000 allocated to Working
Capital if $14,000,000 is raised at the $14.00 per share maximum bid,
represents 47.6% of the contemplated Working Capital (but only 7.14% of
the gross proceeds). Since salaries are inclusive of those amounts paid
to non-affiliates, in no case will salaries exceed 5.0% of the gross
proceeds of this offering in the year following its closing.
(8) Each of these companies is in the process of development, each of which
will be wholly-owned by BioQuest.
(9) While each of the subsidiaries have varying and specific needs and uses
of capital, all will use the investment and working capital toward
establishing, developing and building. The categories of expenditure
include, but are not limited to: personnel salaries and benefits, rent,
furniture, fixtures, equipment, utilities, insurance, taxes, travel and
entertainment, marketing/advertising, etc.
(10) Proposed acquisitions, if any, will be in other businesses allied with
the alternative medicine field but not carried on by our then existing
subsidiaries. In no case are proceeds so committed expect to exceed
$1,500,000 - $2,000,000 - i.e., 15% or less of the amount raised in
this offering.
CAPITALIZATION
The following table sets forth (i) our capitalization as of June 30,
2001; and (ii) our pro forma capitalization on the same date, reflecting (a) the
sale of the 1,000,000 shares offered, for estimated net proceeds of $9.36 per
share, if all share are sold at the $10.00 minimum bid price; and (b) the sale
of 1,000,000 shares offered, for estimated net proceeds of $13.35 per share, if
sold at the $14.00 maximum bid price. (See "Application of Proceeds" and
"Description of Capital Stock.")
June 30, 2001
-------------
As Adjusted
-----------
Actual Minimum Maximum
------ ------- -------
Shareholders' equity Common stock, no par value; 25,000,000 shares authorized;
9,040,473 shares issued and outstanding; 10,040,473 shares to be issued and
outstanding, as adjusted $0 $0 $0
Additional Paid-in capital 1,592,210 10,938,210 14,938,210
Deficit accumulated during the development stage (1,232,229) (1,232,229) (1,232,229)
----------- ----------- -----------
Total shareholders' equity and total capitalization $359,981 $9,705,981 $13,705,981
======== ========== ===========
DILUTION
The following table sets forth the percentage of equity the investors
in this offering will own compared to the percentage of equity owned by the
present shareholders, and the comparative amounts paid for the shares by the
investors as compared to the total consideration paid by the present
shareholders of BioQuest. (See "Description of Capital Stock," "Risk Factors"
and "Capitalization" for a more complete discussion of total number of shares
and associated rights and consequences.) This presentation assumes all 1,000,000
shares being offered are sold at the $10.00 minimum bid. Because our shares are
being sold pursuant to a Dutch Auction (where bids must be at least $10.00 but
could range up to $14.00), the resulting dilution would be proportionately
reduced.
-12-
Dilution for $10,000,000 Offering *
Initial public offering price per share $10.00 (100.0%)
Net tangible book value per share before offering 0.04 (0.4%)
Increase per share attributable to new shareholders 0.93 (9.3%)
Pro forma net tangible book value per share after offering $0.97 (9.7%)
------
Total dilution per share to new shareholders $9.03 (90.3%)
=====
Shares Purchased Total Consideration
---------------- -------------------
Average Price
Number Percent Amount Percent Per Share
------ ------- ------ ------- ---------
Existing Shares 9,040,473 90.0 $ 1,592,210 13.7 $ .18
New Shares 1,000,000 10.0 10,000,000 86.3 10.00
--------- ---- ---------- ---- -----
10,040,473 100.0 $11,592,210 100.0 $1.15
========== ===== =========== ===== =====
Dilution for $14,000,000 Offering *
Initial public offering price per share $14.00 (100.0%)
Net tangible book value per share before offering $0.04 (0.03%)
Increase per share attributable to new shareholders $1.33 (9.5%)
-----
Pro forma net tangible book value per share after offering $1.37 (9.8%)
-----
Total dilution per share to new shareholders $12.63 (90.2%)
======
Shares Purchased Total Consideration
---------------- -------------------
Average Price
Number Percent Amount Percent Per Share
------ ------- ------ ------- ---------
Existing Shares 9,040,473 90.0 $1,592,210 10.2 $0.18
New Shares 1,000,000 10.0 14,000,000 89.8 14.00
--------- ---- ---------- ---- -----
10,040,473 100.0 15,592,210 100.0 $1.55
========== ===== ========== ===== =====
-13-
THE COMPANY
Introduction
BioQuest International, Inc. was organized November 4, 1999 under the
laws of Virginia as a privately held corporation and to exist as a holding
corporation for the purposes of creating, establishing, acquiring, building and
developing various wholly owned subsidiaries, all allied with the alternative/
complementary/ integrative medicine field. We are a development stage company
which has no current operations and has therefore generated no revenues. While
we anticipate fully developing these entities and generating revenues, there is
the possibility that we will not be able to do so if this Dutch Auction,
all-or-nothing, self-underwritten offering is not successful.
During the late summer of 2000, we received gross proceeds in the
amount of $800,210 from the sale of a total of 533,473 shares of common stock at
$1.50 per share, in an offering conducted pursuant to Section 4(2) of the
Securities Act of 1933 and Rule 506 of Regulation D promulgated there under. The
proceeds from such private placement are being used to fund a portion of the
Stage I development of our web-site and to fund the marketing strategies for
this Direct Public Offering over the Internet. Through our offering, we intend
to raise capital to pursue specific targeted business development opportunities
and build and expand our entities currently under development as our basis for
growth and profitability.
The field of alternative/complementary/integrative medicine is a field
which has been largely misunderstood in the past 10 years. It has, however,
grown exponentially, and is expected to continue to do so over the next 10-20
years. This is fueled by a number of factors, including the emergence of HMOs
that have helped to erode the one-on-one patient/doctor relationships of
generations past. Another contributing factor is the evolution of a well
informed and better-educated consumer, many of whom mistrust the profit-driven
motives of giant pharmaceutical companies and the potential side effects of
chemically based drugs. In addition, alternative medicine has suffered in the
past due to a lack of centralized information resources available to the masses,
yet it is being rapidly brought into focus by the onset of the electronic age
and, more specifically, the Internet. Moreover, the field is also highly
fragmented, being made up of hundreds of thousands of individual practitioners
in dozens of disciplines, each following their own practice, perhaps belonging
to a loosely knit association, and all longing for a more competitive,
cost-efficient and cohesive way of doing business in the 21st century.
All of these elements, and many others, have created a unique
opportunity and an exciting challenge for BioQuest. Our mission to fill a major
void in the marketplace by providing the most comprehensive database of
information on medical alternatives and research available; provide the consumer
a base of knowledge through a full spectrum of educational instruction on a
condition-specific basis; and finally furnish our users an extensive selection
of resources appropriate for the prevention and/or treatment of a condition,
malady, illness or disease particular to them. In order to carry out our
mission, we have drafted a master blueprint of operating entities that are
designed to work in harmony with one another in an effort to insure that each
section of the entire loop is achieved and to guarantee that the cooperative
marketing efforts are maximized while concurrently maintaining spending
efficiencies at peak levels in order to derive the highest profits possible.
The Proposed Operating Subsidiaries
BioQuest International Inc. has been structured by combining existing
businesses that BioQuest will develop internally but, in due course, conceivably
through the acquisition of other businesses. This is being done for two reasons.
First by infusing each of these operating entities with sufficient capital, in
addition to providing the proper marketing drivers and marketing management
through the creation of internally developed entities, we will strive to
significantly increase the revenues and earnings of our combined business
operations whether existing, acquired or start-up. It should further be noted
that we expect to cross-market between and amongst subsidiaries, which may
create substantial cost and revenue producing efficiencies within this holding
company structure. Second, this approach will enable us to fold in businesses
which have a synergistic appeal within the field of alternative medicine, and
which fit strategically into our master business model; have been formed and
have a beginning infrastructure; have a historical track record; have begun to
generate revenues; have solid and proven management; have the need for capital
to properly execute their business plan and to grow the business; and have the
-14-
need for a well-designed, comprehensive marketing plan and strategies in order
to achieve their goals.
The following is a brief summary on each of the companies in the
process of development, each of which will be wholly - owned by BioQuest:
(1) BatOutOfHealth.com has not yet generated revenues or profits. Phase I
development is expected to be completed within the next 30 days, Our main
objective is to be the most comprehensive Internet portal within the field of
alternative medicine. This portal, when completed, will provide a single source
site for medical practitioners, individual consumers and companies to go for
information, education, research, products and services related to health and
well being through non-allopathic, natural, holistic and
alternative/complementary therapies. Our principal focus will be on those
preventative therapies employed and practiced in order to avert disease through
a combination of various disciplines and modalities that have been proven to
promote wellness. Alternative/ complementary treatments are available for those
who demonstrate that need. It should be noted that this site has been structured
to become a profit-driven e-commerce site, with B2B and B2C capabilities, and is
not merely an informational site. While we are not a "dot.com" company, a
portion of our business is Internet-based and we note that many dot.com
companies have failed within the past 18 months.
Our business model will use comprehensive information on alternative
medical preventive therapies, protocols and treatments for conditions, maladies,
illnesses and diseases, as well as state-of-the-art research on new treatments,
as its initial draw for users to our website. Built into our site architecture
will be personalized software, enabling us to direct only information of
interest and need to each individual user. In this way, a user clicks onto
BatOutOfHealth.com and is given a full menu of conditions to choose from. Once
users click on one condition, they will see information specific to that
condition. This information will include ways in which to prevent or avert this
condition. Information on curative treatments or therapies will also be given
for each of the alternative medical disciplines which applies to that condition.
As an example, potential treatments or therapies relating to lower back pain may
include chiropractic, yoga, massage, acupuncture, etc.
Once the user has been educated as to the approaches or alternatives
available to them, we will provide resources to such persons, enabling them to
seek out prevention or treatment. These will include, but not be limited to,
further information in the form of books, tapes, CD's, seminars, lists of
practitioners or clinics in their area or elsewhere, as well as products such as
nutritional supplements, herbs and vitamins.
With the personalized software embedded in our back-end architecture,
each time a user clicks or links onto a new area, we use that information to
further tailor our informational offering to each user. When they purchase
items, we know what, when and how much they purchased and, upon their return to
the website, we will tailor products identical or similar to what they ordered
on previous visits, to them on their current visit.
Our users will be asked to register. This registration process will
give us additional information on each user who registers including their name,
address, phone number, email address, age, sex, income level, etc. From this
data, we will create our own user database which we will use to market special
offers or promotions, whether via email or traditional memo.
In structuring this site to become a profit-driven e-commerce site, we
have carefully developed each of the potential revenue producing areas. These
include:
Retail Product Sales Transaction Fees
- -------------------------------------
We will charge each company that lists its products on our site a
one-time set up fee for each product placed in the site catalog. This
set up fee includes two pictures of each product, a thumbnail 64K photo
and an enlarged 250K photo. In addition, as each product is sold, we
will charge a sales transaction fee of a negotiated percentage of the
total price for each vendor individually, such percentage dependent
upon a number of factors (such as size of market share, the number of
products carried, etc.).
-15-
Direct Sales of Private Label Products
--------------------------------------
We will sell selected line of products under our private label brand.
These items will carry attractive gross profit margins.
Wholesale Product Sales Transaction Fees
----------------------------------------
These sales will be made primarily to practitioners such as
chiropractors, naturopaths, acupuncturists, etc. These will include
most of the products carried or sold retail and will also include
equipment used by them in their practices. Similar transaction fees as
retail product sales will apply.
Licensed Dealers
----------------
Many of our practitioners will establish themselves as licensed dealers
of various BioQuest branded products. These practitioners will purchase
products at below wholesale costs, will display and market these
products in their offices and will avail themselves of all company
advertising and marketing in the overall promotions and sale of these
products to the consumer.
Yellow Pages
------------
Practitioners and companies selling alternative/complementary medicine
related products and services will have the opportunity to place
"yellow page" ads, similar to the phone book yellow pages, on our site
for a yearly fee based upon size and design of the advertisement.
Intra-Web Sites/Hosting Fees
----------------------------
Alternative medical practitioners and companies may want to have, use
develop and host their sites within ours. We will charge them a web
design fee and a monthly hosting fee for this service.
E-Banner Advertising
--------------------
We will sell e-banners in hundreds of locations throughout our website.
The revenues generated will be from banner design and set up, as well
as "click through," fees.
E-Mail Advertising
------------------
We will e-mail our users and members on a regular basis. We will sell
e-mail tag-line advertisements with embedded hyperlinks. We will derive
revenues from this source on a click through basis as well.
Pay Per View Events
-------------------
We will feature various seminars, lectures and other events on a pay
per view basis. Many of these will be live-streamed while others will
be archived and available at any time. Alternative media format will be
available on videotape, CD's and DVD through our shopping mall.
Link Fees
---------
Once we have built an established traffic base to our site, we
anticipate that companies will pay us for embedding hyper-links to
their sites. We will charge an annual or multi-year fee based upon
average site traffic to the page of link origination.
-16-
Print Media Advertising
-----------------------
We will mail to each of our members a quarterly 12 page, four color
printed magazine that will highlight major features on the site and
list all upcoming events. Advertising fees for companies or
practitioners placing ads in our magazine will vary according to type,
size and frequency of insertion.
Want Ads
--------
Users and practitioners alike will have the ability to post want ads on
our site in order to sell new and used products, equipment, etc.
related to natural and alternative medicine. We will charge fees on a
per line/per month basis.
Membership Fees
---------------
We anticipate that a percentage of our users will register to become
members. This will entitle them to receive special benefits which may
include discounts on products and services and offers to members only.
We will charge an annual fee to all members.
It should be noted that our portal, while operating as its own separate
entity with the expectation of producing its own revenues and profits, also
serves a critical function of being the electronic marketing driver for each of
the other "brick and mortar" business entities within the BioQuest "family". In
that regard, we will derive revenues from each of these entities, described
below, as we drive customers and business to them. We will charge fees to them,
based upon the average cost of acquiring a new customer from traditional
marketing resources.
In order for BatOutOfHealth.com to drive users or visitors to its
website, it has developed a comprehensive marketing plan. Our target consumer
market is:
o Individuals residing in North America (According to Forrester
Research, over 40% of the Internet user population currently
resides on the North American continent.);
o 18-55 year olds;
o Primarily female;
o Actively concerned about health;
o Uses the Internet several times per week;
o Exists in the upper 50% of the socio-economic demographics; and
o Has a minimum of a high school education, with better than 70% having
some college and 35% having degree.
Our target business market is:
o Chiropractors;
o Naturopaths;
o Acupuncturists;
o Homeopaths;
o Osteopaths;
o Herbalists;
o Body workers;
o Spiritualists; and
o Manufacturers and distributors of nutraceuticals, equipment and
products.
We will employ strategies in the following areas, all designed to
identify and drive users to our site:
o Purchase of keywords;
o Placement of banner ads, with hyper-links to our site, on key portals
and service providers;
-17-
o Registration on all major search engines;
o E-mail ads sent to highly targeted lists of alternative medical,
natural health and health and fitness advocates;
o Direct mail to the same populations as e-mail; and
o Print ads in select alternative health and health and fitness
periodicals.
As described in "Application of Offering Proceeds", a portion of the
proceeds of this offering will be used to build out Phase II of this website,
which will include all personnel, hardware, software and licensed technology and
contracts with outside developmental vendors.
(2) The BioQuest Centre for Natural and Integrative Medicine is dedicated to the
administration of efficacious alternative, natural treatment modalities to
patients from around the world who are afflicted with various diseases. We have
selected the Caribbean as the location of this facility in order to provide an
ideally situated, relaxed, upscale environment which will be conducive to the
integrative healing and recovery of the patient. We will incorporate
case-specific treatment protocols that combine or "integrate" those modalities
which have been demonstrated to be the most efficacious, with the least side
effects, and which may include alternative, complementary and allopathic
(traditional) therapies. Of equal importance is the recognition that the patient
is a holistic person, one that is intimately connected and not just an
arrangement of body systems, parts and organs. In addition to treating the
physical being, we must integrate a harmonious, synergistic approach that
addresses the mental and spiritual components that are interrelated to one's
health, balance and wellness.
We are in the process of processing all request for licenses,
approvals, concessions and incentives from the Government of Antigua for
purposes of establishing BioQuest's Centre for Natural and Integrative Medicine
there. Additionally, we have identified an existing facility which we expect to
convert into our Centre. We are in negotiations at this time with the owner of
this property to purchase this property.
This facility will house a treatment clinic offering principally
outpatient services, but will include a limited number of inpatient rooms, along
with a state-of-the-art research center devoted to finding new, effective,
natural treatments for disease and illness. The Centre will also train
professional doctors and medical practitioners from countries throughout the
world in the specific methods and techniques used in administering these highly
effective treatments and therapies. We are planning to add the training
component during Phase II of the development of our Centre, anticipated to occur
in 2002. It is important to note that this facility will not have the "look and
feel" of a traditional clinic or hospital. In our Centre, you will not see staff
members wearing white coats or carrying stethoscopes around their necks. The
reason is simple. Many, if not most, of the patients we will treat have been
through the conventional medical system where they have undergone surgery,
radiation, chemotherapy and the like. They have come to us because traditional
medicine has failed them. We believe that the last thing they want to see is
another medical institution that looks and feels like one more potential
disappointment.
The treatment, techniques and methods the Centre's doctors will employ
are all modalities that have been proven through extensive research and years of
positive results through their administration to thousands of satisfied patients
in clinics and hospitals throughout the world.
The doctors and other medical practitioners and professionals we will
hire will be recruited in a variety of ways. Our first source will be via our
Internet portal under the "Join the Team" career opportunities section of the
site. Both currently available and anticipated positions will be listed and
e-mail or faxed resumes will be solicited in response to those position
openings.
In addition, many of our medical professionals will come as referrals
and through other "word of mouth" avenues. A referral fee will be awarded to
each employee who refers someone who ultimately is hired by us.
Further, we are working with a number of state and national
professional associations to identify those practitioners who may wish to join
us. We will also begin working with several medical placement agencies on an
as-needed basis. It should also be noted that we intend to hire a number of
professionals native to Antiqua, or other country, where the Centre is located.
-18-
To date, we have successfully recruited not less than six medical
professionals who have committed to coming on board once the Centre is up and
running. Such professionals have further agreed to bring with them those
patients who want to continue treatment with that particular doctor and who are
willing to travel to the Caribbean for treatment.
Patients will come to us from a wide variety of resources. These
include, but are not limited to:
o Word of mouth from current and former patients;
o Patient's who come to us via BatOutOfHealth.com, our Internet portal;
o Referral from our Seminars Program;
o Referrals from our network within the entire Alternative Medical
community;
o Referrals from the conventional medical community; and o Advertising in
select periodicals and related publications.
Some of the treatments and therapies we will employ, individually or in
combination, are:
o Hyperthermia
Hyperthermia is the clinical application of therapeutic heat used
primarily in the treatment of certain cancers, and the reduction of
cancer-associated pain. Research has proven that blood vessels in
normal tissue actually open up, or dilate, when heat is applied in an
effort to flush out the heat and cool down the cell environment.
Because a cancerous tumor is a tightly packed group of cells, blood
circulation is restrictive and sluggish. When heat is applied to the
tumor, the temperature of these cells begins to rise while normal
tissue and cells are kept stabilized by the increased blood flow.
Because of the restrictive blood flow in the tumor, the temperature
continues to rise to destructive levels. In most cases, this requires
an increase in the inner-cellular temperature of only 4(0)F. This
process continues over a period of time even after the treatment,
resulting in vital nutrients and oxygen being cut off from the tumor
cells. The tumor cells are now extremely susceptible to destruction by
radiation or additional heating. The process is continued until the
tumor is destroyed or at least reduced.
o Colon Therapy
Colon therapy, a detoxification process, traces its roots back to
ancient Egypt, India and China. The colonic irrigation, using the
gravitational method, is an internal bath that helps cleanse the colon
of poisons, gas and accumulated fecal matter. It is widely believed
that some of these toxins may be reabsorbed into the bloodstream.
Unlike an enema, it does not involve the retention of water. Colon
therapy is used to help with conditions such as digestive disorders,
skin problems, chronic fatigue, headaches, fibroids and back pain.
o Chelation Therapy
The word chelation is derived from a Greek word ("chele") that means
claw, like that of a scorpion or crab. The concept of chelation is
based on the observation that when a certain amino acid complex called
EDTA (ethylene-diamine-tetra-acetic acid) comes in contact with certain
positively charged metals and other substances (such as lead, iron,
copper, calcium, magnesium, zinc, plutonium and manganese), it grabs
them (hence the chele, or claw) and removes them. Thus, chelation
therapy is the process of removing from the body the undesirable ionic
material by the infusion, or taking orally, of an organic compound
which has suitable chelating properties.
EDTA is a synthetic amino acid first used in the 1940's for treatment
of heavy metal poisoning. It is widely recognized as effective for that
use as well as certain others, including emergency treatment of
hypercalcemia and the control of ventricular arrhythmias associated
with digitalis toxicity. Studies by the National Academy of
Sciences/National Research Council in the late 1960's indicated that
EDTA may be effective in the treatment of occlusive vascular disorders
caused by arteriosclerosis. EDTA grabs metallic cation (such as lead or
calcium) from the body and forms a stable compound that is then
-19-
excreted from the system. The stability of this bond is vital to
success in chelation therapy. If the bond is weak, other chemicals can
break this bond to form their own compounds.
One way to think about chelation process is the way we unclog our
drains. We add a chemical to our drain. This chemical dissolves the
blockage. The resulting compound is removed from the drain using our
existing system.
Chelation therapy is considered to be an effective first step treatment
for atherosclerotic vascular disease. It is an alternative to bypass
surgery or interventional cardiac catheterization techniques of
thrombolysis and balloon angioplasty.
o Acupuncture
Acupuncture literally means "needle piercing," the practice of
inserting very fine needles into the skin to stimulate specific
anatomic points in the body, called acupoints, for therapeutic
purposes. Along with the usual method of puncturing the skin with the
fine needles, the practitioners also use heat, pressure, friction,
suction or impulses of electromagnetic energy to stimulate the points.
The acupoints are stimulated to balance the movement of energy (Qi) in
the body to restore health.
Fundamental to Chinese philosophy and Acupuncture is the concept of
energy. The Chinese believed all phenomena in the universe, including
human beings, to be part of an energy field. Energy was seen as
preceding and permeating all matter: matter itself being a
concentration of energy. The human body is also permeated by energy or
Qi which circulates continuously throughout the body. This "vital
energy" keeps the blood circulating, warms the body and fights disease.
Qi flows along certain pathways, called meridians or channels, forming
a network within the entire body and linking all parts and functions
together so that they work as one entity. There are 12 main channels,
each connected to an internal organ, and many subsidiary channels, all
of which follow a set pathway in the body.
Acupuncture is a method of using fine needles to stimulate the Qi of
the body, thereby affecting the energy balance of a person. If the flow
of Qi is disturbed; if the Qi does not move smoothly through the
channels; if the Qi is blocked, too weak or too strong, then disease
will occur, sooner or later. The aim of acupuncture treatment is to
correct the flow of Qi by inserting needles into particular points
along the channels, thereby bringing about a change in a part or
function of the body. There are hundreds of acupuncture points and each
will affect the Qi in a somewhat different way. Change in the energy
balance of the body precedes physical change so that acupuncture can be
used preventatively, encouraging the body to heal itself by correcting
the Qi before a serious illness can develop.
Acupuncture is primarily used in the United States for the treatment of
chronic pain conditions such as arthritis, bursitis, headache, athletic
injuries and posttraumatic and post surgical pain. It is also used for
treating chronic pain associated with immune function dysfunction such
as psoriasis (skin disorders), allergies and asthma. Acupuncture is
also found to be effective for the treatment of mind-body disorders
such as anxiety, chronic fatigue, irritable bowel syndrome,
hypertension, insomnia, PMS, menopausal symptoms and depression. Some
modern application of acupuncture is in the treatment of disorders such
as alcoholism, addiction, smoking and eating disorders.
o Chiropractic
Chiropractic is one of the largest primary health care professions in
the world after medicine and dentistry. Chiropractic is one of the
descendants from the manual medicine of Hippocrates who, over 2000
years ago in Ancient Greece, advocated manipulation of joints. Early
Chinese, Hindus, Egyptians and Babylonians are known to have used
physical manipulation to treat a whole range of health problems. The
word Chiropractic derives form the Greek Chiero, or hand, and Praktos,
to use, and means literally "done by hand," or manipulation.
-20-
D.D. Palmer, a late nineteenth century Canadian healer, was the founder
of modern chiropractic. He propounded the fundamental principles on
which chiropractic was then based, following Hippocrates' idea that we
should look to the spine for the basic cause of disease. He believed
that if sections of the spine were disturbed in any way, they could
cause interference with nerve impulses which travel through the spinal
cord. Adjusting those parts of the spine which were disturbed was
thought to help the nerve impulses to travel freely.
Chiropractic is used in the treatment of a wide variety of ailments and
pain, including lower back pain, headaches, pain in the shoulder, arms,
hand, hip, neck, thigh, knee, calf, ankle or foot.
o Homeopathy
In conventional medicine, symptoms are considered to be a manifestation
of the disease. Drugs are given to kill the bacteria causing it, or to
dampen the symptom of the condition. Homeopaths, on the other hand, see
the symptoms as the body's attempt to heal itself. They see the symptom
as a positive sign that the body's defense mechanism is trying to fight
the underlying cause and, by this reasoning, they insist that the
symptoms should not be suppressed as we are working against the body's
attempt to cure it.
The laws of homeopathy are the law of similars, the principle of
minimum dose and prescription for the individual. The principle that
like shall be cured by like, or similia similibus carantur in Latin.
This principle, recognized by physicians and philosophers since ancient
times, became the basis of Hahnemann's formulation of the homeopathic
doctrine: the proper remedy for a patient's disease is that substance
that is capable of producing, in a healthy person, symptoms similar to
those from which the patient suffers.
Each of the therapies and treatments employed play an important role in
carrying out our overall philosophy that recognizes that each patient is a
holistic, intimately connected person. We realize that our mental, physical and
spiritual components are all interrelated relative to one's health, balance and
wellness.
We begin our process of treating patients by gathering as much
information about the patient as possible. In many cases, it requires performing
tests to further refine the diagnosis. We then look at each individual patient
from every possible angle, with doctors and practitioners from many disciplines
evaluating each patient. Once this has been completed, we begin to put together
a series of protocols which will work synergistically with one another in
achieving a well state in each patient. We believe that no one therapy can
achieve by itself what perhaps six or eight therapies, combined at once , under
disciplined protocols, may achieve.
The facility we are seeking to house the BioQuest Centre for Natural
and Integrative Medicine will ideally be on the water, and will be complete with
accommodations for patients and their guests/significant others who will travel
with them; a full restaurant for the preparation of highly specialized
nutritional meals; a swimming pool and exercise facility; examination and
treatment rooms; a lecture hall and video theatre; and an administration center.
This facility will also contain sufficient expansion space which will allow for
the growth of the Centre over the next 5-7 years.
In order to make the Centre operational, all approvals, acquisition of
an adequate facility, the financing for this facility, appropriate personnel to
staff this facility and all other start-up expenses will be paid out of the
proceeds of this offering as described in "Application of Offering Proceeds"
(3) The BioQuest Seminar Program is being established to provide a grass roots
approach to educating the general public as to ways in which they can increase
their overall feeling of health and well being. The Seminar Program topics and
content are in the process of being written and refined at this time. The
seminar programs will be directed by Dr. James Chappell, a retired chiropractic
and naturopathic physician, clinical nutritionist and medical herbalist, who has
treated over 7,000 patients in his 30 year career. We expect to be accomplished
the outreach mission of the seminar program through lectures, seminars,
symposiums, conferences, classes and retreats and which be given in all major
markets throughout the United States and in select cities abroad. The topics
covered in each of these venues will focus on health and well being, and will
-21-
provide a valuable forum and structure for participants to "live the experience"
while involved, and then take such education and experience home and put it into
active daily practice.
Several of the topics are:
o "There Is No Incurable Disease"
o "Immunologic Rejuvenation"
o "Systematic Detoxification"
o "Wellness Education"
Among the conditions addressed are:
o Heart Disease
o Cancer
o AIDS
o Alzheimer's Disease
o Diabetes
o Arthritis
o Chronic Fatigue Syndrome
o Herpes
o Sexual Dysfunction
o Depression
o Allergies
o Colds
o Flu
The BioQuest Seminar Program will require administrative staff, sales
and marketing personnel and qualified and trained speakers/program
administrators in order for it to become operational. Upon completion of the
offering, we will use some of the proceeds of the offering, as described in
"Application of Proceeds," to recruit and train appropriate personnel for these
purposes.
(4) BioQuest Media Resources Group will be created to support each of the
operating subsidiaries through its use of and promotion through traditional
media resources. These include newspaper, radio, television, cable,
infomercials, live-streaming audio and video broadcasts on the Internet as well
as newsletters.
The first enterprise underneath the Media Resources Group umbrella to
be developed is a monthly newspaper that will focus on "truth journalism"
reporting on topics that are little known to the public, and yet are of great
concern regarding our health and well being. The President of BioQuest Media
Resources Group is Ms. Nicole Shoong, formerly Editor-in-Chief of the California
Sun, a regional newspaper that focused on exposing potential threats and dangers
to mankind. BioQuest's intent is to establish distribution of its newspaper
publication within every major market in the U.S. and to include it as an
on-line publication within BatOutOfHealth.com, our proposed Internet portal. We
intend to utilize existing distributors, and will establish health food stores
and alternative medical practioner's offices as our primary channels of
distribution. In addition, editions will be mailed to all paid subscribers.
The second entity we plan to develop is Heart to Heart Radio, a weekly
radio talk show which we expect to syndicate nationally and will feature Ms.
Shoong and Dr. Chappell, formerly the hosts of the Shoong and Chappell Show, a
regional weekly broadcast in California and operating with a similar format.
Heart to Heart, hosted by Ms. Shoong and Dr. Chappell, offers a featured guest
each week who is preeminent in his or her discipline within the health industry.
We anticipate airing the shows via live-streaming broadcasts through our
contemplated Internet portal, BatOutOfHealth.com as well.
-22-
We currently have the core personnel in place to administer these two
initial entities within this subsidiary. Additional personnel will be added once
the expansion program is underway. These personnel will be administrative, sales
and technical writing staff. The start-up expenses will be paid out of the
proceeds of this offering.
(5) The BioQuest International Health Foundation is planned to be set up as a
non-profit foundation which will channel private charitable contributions and
government grants and funding into the research of new treatment protocols, as
well as providing treatment, through The BioQuest Centre for Natural and
Integrative Medicine, to a group of patients that are financially less
fortunate.
Future Acquisitions
We have identified a number of synergistic business areas which complement
our existing activities and fit our master business model. Initially, possible
acquisitions would be in activities already being conducted by our then existing
subsidiaries. While no more than 15% of the proceeds of this offering are
expected to be applied to acquisitions, we do intend in due course to establish
additional profit centers in the future. These include, but are not limited to,
wellness retreat centers, alternative medical publications, direct mail
nutritional supplement marketing companies, nutritional supplement manufacturing
operations and a strategic alliance with a major health insurance carrier for
the purposes of underwriting an alternative health only major medical insurance
plan. We have investigated a number of business and acquisition opportunities
and have performed preliminary due diligence on several.
It is our intent to use a portion of the proceeds of this offering to
continue the due diligence process on these projects which may include third
party feasibility studies where management considers such studies prudent to
complete the due diligence. To the extent that we expand via acquisition, a
multi-step process would be followed. Specifically, we intend to develop an
identification process to do internal research on companies which we feel fit
out master business. In addition, we expect to work with a select group of
business brokers to identify certain other companies which may be available for
sale or merger. Once a company has been identified as having "potential fit", we
intend to enter into a mutual non-disclosure agreement with any prospective
company, after which we will begin the process of exchanging basic information
about the companies (including history, market, financials, etc.) We then would
request a face-to-face meeting with the principals and tour their operating
facility. Thereafter, if still a viable candidate, we would begin the process of
the deal structuring and negotiation of price, terms and conditions.
[Balance of page intentionally left blank.]
-23-
[Graphic: Organizational Chart]
-24-
Business Potential
In the future, BioQuest plans to develop additional strategic allied
markets and products and acquire additional companies providing fundamental
synergies toward the overall growth and development of BioQuest. We are
committed to becoming the dominant provider of information, education, products
and services related to integrative/alternative/complementary medicine
throughout the world. We believe it is essential to provide a "complete loop"
that offers the consumer a comprehensive base of information, a process of
education and, finally, resources for purchase, implementation and treatment of
products, services, methods, disciplines and therapies specific to their
individual wants, needs, makeup and situation. In pursuit of this mission, and
in order to achieve this preeminent status, we will employ four key business
strategies throughout our growth and development.
o Dedicate our resources to the development and marketing of information,
educational resources, products, services and sources for the establishment
and maintenance of health and well being in addition to sources for the
treatment of illnesses and diseases within the
alternative/integrative/complementary medicine domain, to the greatest
number of people possible, on a global scale.
o Penetrate target markets through comprehensive consumer and institutional
oriented marketing strategies; drive toward market saturation through
aggressive and effective advertising and promotion for all of the products
and services we offer; and consolidate and direct all effort toward
building the BioQuest brand.
o Within all elements of brand and product development for market readiness,
adhere to the philosophy of differentiation such that our presence,
products and services stand out and stand alone within each of our
categories.
o Maintain our competitive edge over time through the development and
implementation of new breakthrough technologies and processes; the creation
of new products that establish distribution within additional
niche-oriented segments of the market; and invest in new technological
developments via strategic alliances, partnerships, joint ventures,
acquisitions and consulting agreements.
In examining the market conditions relative to our overall business
model, we believe we are in a fertile market for our products and services as
indicated by the following:
o We have a very large consumer base/market size with over 80 million baby
boomers in the U.S. alone, a segment of the population which is
increasingly concerned with slowing the aging process, preventing disease,
optimizing health and improving their overall quality of life as they
approach or enter mid-life.
o In addition, the generation X population is better educated, have higher
incomes and demonstrate an established and growing regard for health and
fitness that exceeds that of previous generations.
o Today, 45% of all Americans take vitamins, supplements, herbal products or
dietary aids on a daily basis, with an additional 23% who do so several
times per week. This popularity is feeding the $11.5 billion supplement
business.(1)
o The explosive growth of the "nutraceuticals" market, which includes all
dietary supplements, is an $86 billion industry.(2)
o A pendulous shift from conventional medical care and practices to
alternative therapies and treatments has taken place within the past
decade. In 1997, Americans made 600 million visits to alternative medical
practitioners, eclipsing visits made to their conventional primary care
physicians. They also spent $27 billion out of pocket on alternative care,
compared to $29 billion in un-reimbursed physicians' services. (3)
o The "War on Cancer" is being lost: although billions are being spent on
cancer research, the incidence rate has increased by 18% and the mortality
rate has increased by over 6% over the past 30 years. (4)
-25-
o According to the American Cancer Society, 1.5 million new cases of cancer
were diagnosed in 1999, with nearly 600,000 dying in the U.S. Predictions
indicate that one out of three of us will develop cancer in our lifetime,
88 million people in the United States alone. This creates a significant
opportunity for BioQuest and anyone else that possesses proven and
effective means for treating cancer patients. Nearly 80% of all patients
treated in our Centre initially will be those who conventional medicine has
failed. Over time, through the education process to be administered via our
Internet portal, we will get to these patients much earlier, and will arm
them with natural alternatives, which they may choose over those available
within conventional medicine. (4)
o The pandemic spread of HIV/AIDS has infected more than 200,000 people in
the U.S. in the last decade. More than half have died, most within 4 years
of showing symptoms of the disease. The Centre for Disease Control (CDC)
reports that 2.2 million Americans now carry the HIV virus, but are not yet
symptomatic. Global estimates are very low due to a lack of reporting and
lack of adequate definition. It is estimated, however, that there are over
33 million people living with HIV/AIDS at this time, with over 5 million
new cases being reported, and claiming 2.5 million lives, each year. (5)
o Today there are over 40 million Internet users in the U. S. alone, with
that number expected to grow exponentially over the next decade. It is
estimated that 50% of Internet users will be shopping on-line by 2001, with
53% being women. It is further estimated that by 2004, on-line shopping
will reach $3.2 trillion.(6)
Footnotes:
(2) The NPD Group, Inc., Port Washington, New York, October 20, 1998, Vitamin
Usage on the Upswing, NPD Group's Thirteenth Annual Report on Eating
Patterns in America.
(3) Nutrition Business Journal, San Diego, California, $86 Billion Market for
Nutraceuticals - More Clinical Studies Needed to - Grow Category.
(4) Time Magazine, Time, Inc., New York, New York, November 23, 1998, Herbal
Healing and Boston Globe, Globe Newspaper Company, Boston, Massachusetts.
May 1, 2001, Medical Researchers Weigh "Alternatives"
(5) American Cancer Society (various statistics from their website,
www.cancer.org).
(6) Centre for Disease Control (various statistics from their website,
www.cdc.gov).
(7) The Wall Street Journal, Dow Jones & Company, Inc., New York, New York
(various articles on their website www.wsj.com).
Markets and Customers
In order to successfully establish and develop the BioQuest brand
throughout all of our operating entities, we have carefully researched our
markets to identify our core customers and target markets. What is of interest
is that there is a significant overlap in our customer base, creating a unique
opportunity to leverage the brand in a most cost-efficient manner, by utilizing
cross-over marketing and sales campaigns, which will result in driving customers
and sales to multiple business entities at once. BioQuest has devised a
comprehensive marketing strategy designed to facilitate the achievement of our
overall sales, distribution and profit objective. Our approach for our initial
stage of growth is to combine the elements of high volume, high margin venues
with aggressive consumer-oriented advertising via a combination of the Internet
and traditional media, along with promotional programs intended to maximize both
product trial and repeat sales.
We will focus its initial marketing efforts on establishing and
building the "BioQuest" brand. To do so will require us to employ a
multi-faceted, synergistic marketing approach across all segments of our
business.
BioQuest, through BatOutOfHealth.com, our Internet website, will employ
the strategies already outlined above. Once we have driven users to our site, we
will attempt to get them to navigate our site completely. This will be done by
providing fresh and up-to-the-moment content, well-designed, visually appealing
graphics and the liberal used of multi-media animation or flash presentations
throughout the site, along with a highly user-friendly navigation system
enabling users to move from one area to another with relative ease. Embedded in
the site will be subsections and links to intrasites for each of our operating
subsidiaries. For example, if a user was researching osteoarthritis and they
-26-
wanted to see if there was a lecture or seminar being held on that topic, they
would click onto BioQuest Seminar Program to inquire.
In this way, once we have a captive user, we want to expose him or her
to every aspect and facet of our business, thus leveraging and building the
"BioQuest" brand.
Likewise, through traditional media, we will expose our potential
customers to the BioQuest brand. We will do that both internally - through the
BioQuest Media Resources Group - and externally (through print, broadcast,
infomercials and direct mail).
BioQuest Media Resources Group is constructing its first enterprise, a
monthly newspaper focused on "truth journalism" related to health. We have
selected the initial markets where we will introduce our paper. These include:
Atlanta, Georgia; Austin, Texas; Los Angeles, California; Naples, Florida; San
Francisco, California; Seattle, Washington; and Washington, D.C. This 24 page
publication will contain 8 pages dedicated to advertising tailored to the
specific geographic market. The papers will be distributed primarily on a free
basis to health food stores, nutritional supplement retailers and health and
fitness clubs. We anticipate an initial distribution of 50,000 copies per month
in each market. While we will also sell paid subscriptions, we anticipate our
paid subscriptions to be less than 1% of the total circulation, initially.
It should be noted that a percentage of our ad space will be reserved
for advertising by other BioQuest entities, another way we will continue to
leverage the BioQuest Brand.
BioQuest Media Resources Group is also developing "Heart to Heart
Radio" to distribute on a syndicated basis. We are in the process of identifying
radio stations to carry this radio show in the same markets in which we will
distribute our newspaper. In this way, we support the newspaper with radio and
vice versa through plugs or mentions in each. And, as with the newspaper, we
will reserve a certain number of on the air spots for advertising by one of our
other BioQuest entities.
Further, BioQuest Media Resources Group intends to develop a hard copy
and electronic monthly newsletter which will be distributed to each of our
members and users. The newsletter will report on various activities of all of
the BioQuest family of companies; will contain advertising; and will also
contain other human interest articles and anecdotes.
Externally, we have targeted our initial strategy to a select group of
the most significant health-related periodicals where attractive and impactful
print ads will be placed announcing the arrival of BioQuest. In this way, we
believe we will attract new customers to BioQuest from venues they are currently
using as one information source for their health related issues. An example of
several (none of which we have contracted with) might be:
o Alternative Medicine
o Prevention
o Vegetarian Times
o Natural Way
o Shape
o Women's Fitness
In addition, we will use radio stations, other than those syndicating
our radio show, to advertise on. We will use them to announce the arrival of our
newspaper and radio show in the markets previously mentioned. Radio will also be
used extensively, along with newspaper print ads, in announcing seminars which
will be held in major markets throughout the country.
We anticipate our patients coming to us from a wide variety of sources.
These include, but are not limited to:
o Word of mouth from current and former patients
o Via our Internet portal, Bat-Out-Of-Health.com
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o Referrals from our Seminars Program, radio show and newspapers
o From our existing and anticipated expanding network within the
alternative medical community
o Referrals from the conventional medical community
o Advertising in select periodicals and related publications
Competition
In assessing the competition in each of our divisions, we have analyzed
all factors we believe are involved in assessing who our "true" competition is.
Included are those entities that we feel are, or could be, in direct competition
with BioQuest. With some of the entities, there are hundreds of competitors, and
with others, virtually none. A breakout by business division follows:
(1) BatOutOfHealth.com
--------------------
There are thousands of web sites with a relationship to health, fitness
and alternative or complementary medicine. There are many thousands more that
involve traditional medicine. BioQuest, in having spent nearly two years
developing its concept, researched thousands of sites to determine what was, and
what was not, available on the Internet. It is our opinion that a major Internet
portal, as completely comprehensive as we contemplate building, does not exist.
The top 10 heath care sites ranked according to usage are (8):
Rank Website Reach Unique Users (000) Page Views (000) Hours (000)
---- ------- ----- ------------------ ---------------- -----------
1 Webmd.com 6.6% 6,550 71,692 1,542
2 Allhealth.com 3.4% 3,359 25,666 624
3 Ediets.com 2.9% 2,873 27,702 817
4 Nih.gov 2.5% 2,481 24,043 593
5 Drkoop.com 1.4% 1,348 11,634 261
6 Healthscout.com 1.0% 953 4,530 100
7 Medscape.com 0.8% 824 8,505 378
8 Healthandage.com 0.8% 804 2,018 36
9 Merckmedco.com 0.6% 606 11,702 422
10 Realage.com 0.5% 538 3,930 73
Reach %:
This is simple division of the Unique Users divided by the total estimated
population viewing the web during the reported time period.
Unique Users:
The number of web-active individuals who visited a particular site or web
property within a given period. Each visitor is represented only once as a
unique user.
Page Views:
The total number of pages viewed by PC Data Online pane at a particular site or
within a specific property. If a single user views a page three times, this will
count as three page views. Hours:
This is a measure of the total number of hours each site is viewed by all of the
users during the reported time period.
Footnotes:
(8) PC Data Online, February 2001 (http://www.pcdataonline.com/).
----------------------------
It should be noted that while there has been an overall proliferation
of health related websites, a number of those have fallen in disfavor with the
market and some have, in fact, gone out of business.
-28-
(2) BioQuest Centre for Natural and Integrative Medicine
----------------------------------------------------
There are a number of "alternative" medical clinics and hospitals,
located principally within Mexico and a few in the Caribbean, where patients
seeking alternative therapies can travel and be treated. Nearly all of these
clinics/hospitals specialize in one therapy, and in a few cases several
therapies, and treat a limited number of diseases.
BioQuest believes this approach falls far short of the optimum
objective which is to get the patient well and to keep the patient well. This
involves many things, principally educating the patient and his/her family about
the lifestyle changes that must take place in order for the patient to achieve a
greater overall state of wellness. In addition, training in techniques and
protocols to be employed upon the patients' return home will be administered
during each patient's stay at the Centre. While BioQuest may use some of the
alternative treatment modalities being used by other clinics, it will do so only
in combination with the rest of our program.
In response to that void, BioQuest has designed a structure to offer a
full and complete selection of alternatives and some traditional allopathic
therapies for the treatment of most diseases, having chosen and incorporated
only those treatments which have been proven to be most effective.
Of perhaps utmost importance, and what we believe will set the BioQuest
Centre for Natural and Integrative Medicine apart from our competitors and the
rest of the world, is the individuality with which we will diagnose and
prescribe an integrated course of treatments to each patient we deal with. A
panel of doctors and practitioners with different disciplines and expertise on
staff at the Centre will, as a group, evaluate each and every patient, and will
then determine the component treatment program deemed most effective for
him/her. The Centre will treat not only the diseases being treated by our
competitor clinics, but will treat many others including cancer, heart disease,
AIDS, Alzheimer's Disease, diabetes, arthritis, chronic fatigue syndrome,
herpes, sexual dysfunctions, depression, allergies and many other auto-immune,
progressive diseases and chronic conditions. The protocols used in treatment, as
previously indicated, will be used in combination in treating the whole person
and not just the specific condition. There are over 60 disciplines and hundreds
of treatment modalities which will be used. To the best of our knowledge and
understanding, through our own internal research, we do not know of a facility
employing such a broad approach.
Several of the clinics/hospitals which offer alternative treatment modalities
are:
>> BioPulse (Tijuana, Mexico): This clinic offers inpatient and outpatient
medical treatments. Specializing in cancer, it uses induced
hypoglycemic treatment (IHT) as its primary therapy.
>> Europa Institute of Integrated Medicine (Tijuana, Mexico): This clinic
offers only outpatient treatments. It offers hyperthermia, high pH
cesium therapy, sterile aloe vera therapy, U.B.I., ozone, cytokine,
chelation and orthomolecular therapies.
>> IB Hospital and Medical Centre (Tijuana, Mexico): This clinic
specializes in cancer and chronic degenerative disease, utilizing
hyperthermia, U.B.I. and bioelectrical repolarization (BER) therapies.
>> Immuno-Augmentation Therapy (IAT) (Caribbean): This clinic treats
cancer only, utilizing subcutaneous injections of human proteins found
in blood sera, to stimulate the immune system, versus treating the
cancer itself.
(3) BioQuest Seminar Program:
---------------------------
While there are many seminars and lecture circuits on everything from
personal finance to investing in the stock market to learning the art of
negotiation, we are aware of only a limited number of seminars available
which directly address the alternatives available for the treatment of
disease and the maximization of health and well-being.
-29-
(4) BioQuest Media Resources Group:
------------------------------
(a) The California Sun Newspaper
There are many regional newspapers, tabloids and newsletters with a focus
on health and its related aspects. BioQuest's objective is to expand the
distribution of this monthly newspaper nationally in order to reach
critical mass with its current and intended advertisers. Several similar
publications are:
o The Progressive Populist;
o Nexus Magazine; and
o The Spotlight.
(b) The Shoong & Chappell Radio Show
There are many talk show radio formats across the country. Most are market
specific, with a few that are national. We are unaware of any "truth
journalism", health-related radio shows that are nationally syndicated.
Several local examples of this type of radio show are:
o The Art Bell Show;
o The Jeff Rense Show; and
o The Roy Tuckerman Show.
Industry Regulation
As an employer, we are subject to all federal, state and local statutes
and regulations governing our relationship with employees and affecting
businesses generally.
Management
By way of summary, the following table reflects the name, age and
position of our Executive Officers and Directors. Please see the biographical
information, which follows:
Name Age Position
Peter J. Ewens 52 President, Chief Executive Officer and Director
Roger Miller 68 Chief Financial Officer, Secretary and Director
James Chappell, D.C., N.D. Ph.D., M.H. 50 Vice President of Medical and Scientific Technology
Nicole Shoong 47 President of BioQuest Media Resources Group
See also disclosures contained in "Litigation/Maryland Disclosure."
All directors hold office until the next annual meeting of our
shareholders and until their successors have been elected and qualify. Officers
serve at the pleasure of the Board of Directors. Mr. Peter Ewens will be
employed, in his capacity as President, on a full time basis. Mr. Roger Miller
will be employed, in his capacity as Chief Financial Officer, on a part-time
(approximately 50%) basis. Dr. James Chappell, will be employed, in his capacity
as Vice President of Medical and Scientific Technology, on a full time basis.
Ms. Nicole Shoong will be employed, in her capacity as President of BioQuest
Media Resources Group, on a full time basis. Under these agreements, the
medically-related activities of Mr. Ewens, Dr. Chappell and Ms. Shoong will be
incorporated into and effected through the Company.
-30-
It should be noted that we have number of consulting/retainer
agreements with outside individuals or companies. Those are:
o Vertical Solutions, a company contracted with to provide Phase I web
design and development for BatOutOfHealth.com.
o Kirk Cizerle is under a consulting contract to provide e-commerce
management services necessary in implementing our new website,
BatOutOfHealth.com. In this capacity Mr. Cizerle is responsible for the
planning and managing of the design and development efforts to launch
Phase I of the website.
o Tani Hurley Public Relations, Inc. has been retained by BioQuest as its
investor and public relations firm.
o Alexander Creative Consulting is under agreement with BioQuest for the
purposes of providing marketing management consulting to BioQuest. In
this regard, they are responsible for providing marketing
communications, research, planning and coordination as requested by
BioQuest.
o Raymond J. Stewart has been retained a corporate legal counsel,
representing BioQuest in connection with advice regarding its
development and execution of its business strategy.
o Carl N. Duncan has been retained as securities counsel in connection
with our direct public offering.
It is expected that additional personnel will be employed to assist in
operations and financial management. We have also identified several people that
are candidates for key positions within the organization. BioQuest has discussed
opportunities with some of these people and intends to actively recruit them
upon obtaining adequate funding. Management recognizes that their expertise and
experience is essential to success of our business plan. We also intend to
continue to expand our advisory group in the areas of business and finance.
Peter J. Ewens, Chief Executive Officer and President
- -----------------------------------------------------
Mr. Ewens, as described below, has been associated with several
successful companies over the past 25 years. Prior to BioQuest, from 1985
through 1999, Mr. Ewens founded and built a food manufacturing, marketing and
distribution company, Amorous Andi's, which provided high quality,
niche-oriented products to the retail and food service industries in the United
States. While Mr. Ewens was its operations principal, the company grew from
sales of $145,000 to $1,201,000, a 728% increase, during the period from 1985
through 1989, and was named to the Inc. 500 as one of the fastest growing
private companies in the United States. Growth of the company reached a peak in
sales of just over $4 million.
Prior to that, Mr. Ewens was a member of the initial sales and
marketing team that started Computer Learning Centers. Mr. Ewens advanced to
Director of Admissions and then ultimately to Computer Learning's Director of
Marketing and Sales which had then become a division of Airco, Inc., a Fortune
500 company, following its purchase of Computer Learning Centers. While, in this
capacity, he was responsible for the production and management of media
advertising for schools in over 20 major markets and the company built sales to
over $100 million.
Mr. Ewens attended Marquette University, Milwaukee, Wisconsin from 1967
to 1968 as an undergraduate in Business Administration.
Roger Miller, C.P.A., Chief Financial Officer and Secretary
- -----------------------------------------------------------
Mr. Miller is a practicing tax consultant and has been in this field
for the past 50 years. In addition to his involvement in the field of tax
consulting, Mr. Miller was a Presidential appointee during the Carter
Administration, responsible for the creation and implementation of the
allocation and price regulations for propane, butane and other fuels for the
entire United States.
-31-
Mr. Miller is currently the President of Miller and Associates, Inc.,
in Naples, Florida. The firm represents over 3,000 individual and corporate
clients worldwide and specializes in tax and financial consultation and
planning. Miller and Associates is a three-year old company.
Prior to Miller and Associates, Mr. Miller was President of Miller and
Paige, Inc. of Annandale, Virginia for 20 years. Mr. Miller sold this firm to
his former partner, Phyllis Paige. Miller and Paige, Inc. performed the same
services to a like number of clients as Miller and Associates, Inc.
Mr. Miller received his Law degree from Brooklyn Law, New York in 1960.
Mr. Miller became a Certified Public Accountant in New York State in 1959. Mr.
Miller received his Bachelor of Science in Accounting from Long Island
University in Brooklyn, New York in 1950.
James Chappell, D.C., N.D., Ph.D., M.H.,
Vice President of Medial and Scientific Technology
- --------------------------------------------------
Dr. Chappell has treated over 7,000 patients in a career that began in
1971 and included many Hollywood actors, producers and directors. Dr. Chappell
recently retired from active practice as a chiropractic and naturopathic
physician, clinical nutritionist and medical herbalist, and is now active
teaching people his well-known technique for health and natural healing. This
technique specializes in chronic and terminal diseases through education in
immunologic rejuvenation(TM) and systemic detoxification(TM). Among the
conditions addressed are cancer, AIDS, heart disease, chronic fatigue syndrome,
arthritis, herpes, sexual dysfunction, Alzheimer's disease, Parkinson's disease
and diabetes. Although he has not previously run a clinic, Dr. Chappell has
spent the past five years treating numerous patients and establishing the Shoong
and Chappell and/or related Heart to Heart radio shows.
Dr. Chappell, in his capacity as Vice President of Medical and
Scientific Technology, will oversee all aspects of professional medical
administration and technology within each of BioQuest's operating subsidiaries.
This specifically includes his role as Medical Director of The BioQuest Centre
for Natural and Integrative Medicine in Antigua.
Dr. Chappell has spent the past year recruiting, interviewing and
making contingent offers of employment to doctors, alternative medical
practitioners and nurses who will staff the BioQuest Centre for Natural and
Integrative Medicine. Additionally, he has done preliminary layout designs for
the Centre's facilities. He has also written and edited hundreds of pages of
medical web content for the Phase II build-out of the BatOutOfHealth.com
Internet portal. In addition, Dr. Chappell has sourced most of the required
medical-related equipment for the Centre.
Dr. Chappell, a principal in BioQuest, had an existing seminar program
and an herbal products business prior to joining BioQuest. Once the offering has
been successfully concluded, Dr. Chappell will devote 100% of his time to
BioQuest per his Employment Agreement, and his herbal products will then be
marketed, sold and distributed by BioQuest and under the BioQuest label through
BioQuest subsidiaries without the payment of additional consideration.
In 1980 Dr. Chappell received his Bachelor of Science in Psychology
from Pacific Christian College in Fullerton, California. In 1977 Dr. Chappell
received his Chiropractic Doctorate (D.C.) from the Cleveland Chiropractic
School in Los Angeles, California. Dr. Chappell received his Naturopathic
Doctorate (N.D.), from the Naturopathic College of California in Los Angeles,
California in 1970. He also received his Doctor of Philosophy in Holistic
Nutrition (Ph.D.), from the Naturopathic College of California in Los Angeles,
California in 1970. Prior to that Dr. Chappell received his Master Herbalist
Medical Degree, (M.H.), from Dominican Herbal College in Quebec, Canada in 1969,
and attended Ventura Junior College in Ventura, California from 1967 to 1968.
-32-
Nicole Shoong, President of BioQuest Media Resources Group
- ----------------------------------------------------------
Nicole Shoong has been an active advocate behind critical health issues
for the past 20 years. In 1994, she created The California Sun newspaper, a
monthly publication devoted to issues of health, science, the environment,
politics, self-empowerment and personal discovery.
In 1998, Ms. Shoong established The California Sun News Hour, an hour
talk radio program with an interview listener call-in format. The program aired
on KFNX in Phoenix, Arizona and WALE in Providence, Rhode Island.
Ms. Shoong has developed six issues of The California Sun (to be
renamed) for publication and distribution after the conclusion of BioQuest's
offering. In addition, she has begun discussions and negotiations with
distributors for the newspaper in over 30 major market in the United States. She
has also spent time formatting subjects and sourcing alternative medicine
luminaries as future guests for the Shoong and Chappell radio show.
Ms. Shoong has an existing business relationship to the newspaper and
radio show described above. Once this offering is successfully concluded, Ms.
Shoong will devote 100% of her time to BioQuest as indicated in her Employment
Agreement and the newspaper and radio show will then be distributed through a
subsidiary of BioQuest without the payment of additional consideration.
Ms. Shoong attended Marin College in Kentfield, California in 1971, the
University of Las Vegas in Las Vegas, Nevada in 1971 and the University of
Wisconsin in Madison, Wisconsin from 1969 through 1970.
Ms. Shoong has joined us as our BioQuest Media Resources Group
President which has been established to support each of the operating
subsidiaries through its use of, and promotion through, traditional media
resources.
Executive Compensation and Employment Contracts
BioQuest was formed on November 4, 1999, and therefore paid no
compensation prior to that time. At such time as we commence operations, it is
expected that the Board of Directors will approve the payment of salaries in a
reasonable amount to each of its officers for their services to BioQuest.
All key management personnel have executed Employment Agreements with
us. All agreements are for a term of five (5) years from October 15, 2000. All
carry standard terms that include compensation, benefits, disability,
non-competition and termination of employment provisions. In addition,
incentives in the form of options to be issued under a proposed stock option
plan is contemplated but has not yet been developed.
The salaries, the only variable material terms amongst these Employment
Agreements, will be as follows:
Name Annual Salary
---- -------------
Peter J. Ewens $240,000
Roger Miller $140,000
James Chappell, D.C., N.D., Ph.D., M.H. $140,000
Nicole Shoong $100,000
Below, please find the Summary Compensation Table providing a detailed breakdown
of compensation paid to all officers of the company for fiscal years 2000 and
2001.
-33-
Summary Compensation Table
--------------------------
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ -------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Restricted Securities
Other Annual Stock Underlying LTIP All Other
Name and Salary Bonus Compensation Award(s) Options/SARs Payouts Compensation
Principal Position Year ($) ($) ($) ($) (#) ($) ($)
- ------------------ ---- --- --- --- --- --- --- ---
Peter J. Ewens - CEO 6/30/01 $ 108,025(1) 0 0 0 0 0 0
6/30/00 $ 70,280(1) 0 0 0 0 0 0
Dr. James Chappell - VP 6/30/01 $ 412,500(2) 0 0 0 0 0 0
6/30/00 0 0 0 0 0 0 0
Nicole Shoong 6/30/01 $ 388,332(2) 0 0 0 0 0 0
6/30/00 0 0 0 0 0 0 0
Roger Miller -CFO 6/30/01 0 0 0 0 0 0 0
6/30/00 0 0 0 0 0 0 0
(1) Of these amounts, $106,080 was paid to Mr. Ewens under an oral consulting
agreement from November 4, 1999 (inception of the company) through October
15, 2000. $72,225 was paid to Mr. Ewens under his Employment Agreement from
October 15, 2000 through June 30, 2001.
(2) Compensation for Dr. Chappell and Ms. Shoong includes $375,000 of stock
received for prior services rendered. Each received 250,000 shares of
BioQuest common stock valued at $1.50 per share.
Please note that since the commencement of these employment agreements
on October 15, 2000, only partial payments, aggregating $126,607, have been paid
to the respective officers, under oral agreement with each, in an effort to
conserve capital during this IPO phase.
As BioQuest's operations develop, it is anticipated that additional
personnel may be hired. It is generally anticipated that any such future
individuals will devote full time to BioQuest. At such time, the Board of
Directors may, in its discretion, approve the payment of additional cash or
non-cash compensation to the foregoing for their services to BioQuest.
BioQuest does not provide officers with pension, stock appreciation
rights, long-term incentive or other plans but has the intention of implementing
such plans in the future.
Since all directors are also officers, members of the Board of
Directors will not be paid separately for their services. Directors'
out-of-pocket expenses will be reimbursed upon presentation of appropriate
documents.
Employee Benefits
It is anticipated that we will implement, in the near future, a
restricted employee stock option plan under which our Board of Directors may
grant employees, directors and certain advisors of BioQuest options to purchase
its shares at exercise prices of not less than 85% of the then current market
price on the date of their grant. Income from any such options is not expected
to be tax deferrable. As of the date of this prospectus, the plan has not been
defined and no options have been granted but it is anticipated that shares will
be reserved. Moreover, BioQuest will not grant options during this offering
period in excess of 15% of the aggregate shares which will be outstanding upon
conclusion of this offering and, in fact, none are contemplated.
BioQuest anticipates that it will adopt, in the future, an employee
bonus program to provide incentive to our employees. It is anticipated that such
a plan would pay bonuses in cash or stock to employees based upon BioQuest's
pre-tax or after-tax profit for a particular period. It is anticipated that we
will adopt a retirement plan such as a 401(k) retirement plan and that we will
implement an employee health plan comparable to the industry standard.
Establishment of such plans and their implementation will be at the discretion
of the Board of Directors; any such bonus plan will be based on annual
objective, goal-based criteria developed by the Board of Directors for eligible
-34-
participants and will be exercisable only at prices greater than or equal to the
market value of the underlying shares on the date of their grant.
Employee(s)
BioQuest currently maintains its office rent-free at the home of Mr.
Peter J. Ewens, the CEO and a director of BioQuest, at 11217 Silverleaf Drive,
Fairfax Station, Virginia 22039. Its telephone number is (703) 764-4464.
BioQuest anticipates that it will have continued use of this office on a
rent-free basis for the foreseeable future and that this arrangement will be
adequate for our needs while it is in the development stage. Assuming that
BioQuest obtains the necessary additional financing and is successful in
implementing its business plan, BioQuest will require its own commercial
facility to be located in Northern Virginia. In such event, management believes
that BioQuest would be able to locate adequate facilities at reasonable rental
rates in Northern Virginia, suitable for its future needs.
It is not expected that future employees will be represented by employee
union(s).
Material Agreements
To satisfy certain regulatory comments, we hereby summarize certain
agreements designated as material contracts in our Form SB-2 Registration
Statement not otherwise addressed:
1. We have entered into a media agency service agreement with Mediasmith,
Inc. We pay Mediasmith for their services a $15,000 monthly minimum
payment against an agency commission of 12% of cumulative gross media
spending. That agreement provides for Mediasmith to plan and place
media for us. This includes media planning, media buying and post-buy
administration services. Virtually all media will be purchased on the
Internet, and its purpose will be to reach prospective investors for
our online Dutch Auction offering. Prospective investors will be
invited via banner ads and email to visit the www.bioquetipo.com
website to view the prospectus and bid on shares of stock.
2. Our flash and graphic development services agreement with FigLeaf
Software, Inc. , for a flat contract amount of $15,000, relates to the
design and execution of a one minute media flash video presentation as
an opening for our www.BatOutOfHealth.com website as well as a
potential media email presentation. The completed presentation has been
developed into a mini CD-ROM for use as a handout with business cards.
3. Our website development agreement with ccgenesis provides for ccgenesis
to further develop, for a flat contract amount of $12,000, both the
creative and functional aspects of Phase I of the
www.BatOutOfHealth.com website. With the exception of some minor
refinements, ccgenesis has completed their work under this agreement.
4. Our monthly service fee with Adam Friedman Associates, of $8,500 covers
having the firm serve, consistent with securities requirements, as
public relations and investor relations counsel prior to and after our
all-or-nothing, best-efforts, Internet-based Dutch Auction direct
public offering.
In addition, to comply with certain state regulators' concerns about
the level of capital contributions, our principals, at least Messrs. Ewens and
Miller, have agreed to contribute, in the aggregate, $282,000 in additional
capital for their previously issued shares. These contributions must be made on
or before the date net proceeds from this 1,000,000 share all-or-nothing
offering, if successful, are released from escrow. Failure to pay the additional
cash capital contribution will invalidate this Dutch Auction offering.
Litigation/Mandated Disclosure
There has not been any material civil, administrative or criminal
proceedings concluded, pending or on appeal against BioQuest or its affiliates
and principals (nor are any threatened or pending).
-35-
Pertinent SEC rules require for any principals disclosures of personal
bankruptcies during the past five years and corporate bankruptcies during the
preceding two years. Responsive to those standards, Mr. Ewens was a principal of
AA Group, Inc., a specialty bakery products company doing business as Amorous
Andi's in the Washington, D.C. region. AA Group, Inc. was forced into bankruptcy
because of misappropriation of escrowed funds by its former securities counsel.
A lawsuit between the parties ensued. After depleting its assets in pursuing
such litigation, AA Group, Inc. filed a Chapter 7 petition in bankruptcy April
18, 2000 and was discharged from bankruptcy May 22, 2000.
Family Relationships
There are no family relationships between BioQuest and any director or
executive officer.
FIDUCIARY RESPONSIBILITY OF THE COMPANY'S MANAGEMENT
Counsel has advised BioQuest's management it has a fiduciary
responsibility for the safekeeping and use of all assets of BioQuest. Management
is accountable to each shareholder and required to exercise good faith and
integrity with respect to its affairs. For example, whether under SEC and/or
general fiduciary principles, management cannot commingle property of BioQuest
with the property of any other person, including that of management.
The SEC has stated that, to the extent any exculpatory or
indemnification provision purports to include indemnification for liabilities
arising under the Securities Act of 1933, (the "Securities Act"), it is the
opinion of the SEC that such indemnification is contrary to public policy and,
therefore, unenforceable. Shareholders who believe that BioQuest's management
may have violated applicable law regarding fiduciary duties should consult with
their own counsel as to their evaluation of the status of the law at such time.
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND THE PRINCIPAL SHAREHOLDERS
The following table summarizes certain information with respect to the
beneficial ownership of BioQuest's shares, immediately prior to and after this
offering. The following table sets forth information as of June 30, 2001,
regarding the ownership of BioQuest's common stock by each shareholder known by
BioQuest to be the beneficial owner of more than five percent (5%) of its
outstanding shares, each director and all executive officers and directors as a
group. Except as otherwise indicated, each of the shareholders has sole voting
and investment power with respect to the shares of Common Stock beneficially
owned.
Prior to Offering(1) After the Offering(2)
----------------- ------------------
Name of Beneficial Owner: Address: Number % Number %
- ------------------------- -------- ------- ---- ------- ----
Peter J. Ewens 11217 Silverleaf Drive 4,000,000 44.2% 4,000,000 39.8%
Fairfax Station, VA 22039
Roger Miller 223 Dolphin Cove Court 4,000,000 44.2% 4,000,000 39.8%
Bonita Shores, FL 34134
Dr. James Chappell 410 Country Club Drive 250,000 2.8% 250,000 2.5%
Ojai, CA 93023
Nicole Shoong 410 Country Club Drive 250,000 2.8% 250,000 2.5%
Ojai, CA 93023
--------- ---- ------- ----
All Directors, Officers and 5%
Shareholders as a Group: 8,500,000 94.0% 8,500,000 84.7%
========= ===== ========= =====
All Beneficial Owners as a Group 9,040,473 100% 10,040,473 100%
========= ==== ========== ====
(1) Reflects total outstanding shares of 9,040,473 as of June 30, 2001.
(2) Assumes issuance and sale of 1,000,000 shares of BioQuest during this
offering in addition to the 9,040,473 shares outstanding as of June 30, 2001, an
aggregate 10,040,473 shares.
-36-
To satisfy state regulatory requirements, we have agreed to place all
shares held by Messrs. Ewens and Miller, Dr. Chappell and Ms. Shoong in a four
(4) year lock-up. Under the associated agreement with the state regulators,
shares must be held until the later of when our shares are listed on an exchange
or on NASDAQ or October 21, 2005.
SELECTED FINANCIAL DATA
The following table sets forth certain financial data for BioQuest. The
selected financial data should be read in conjunction with BioQuest's
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Financial Statements of BioQuest and Notes thereto. The
selected financial data as of and for the period from November 4, 1999 (date of
inception) to June 30, 2001 have been derived from BioQuest's financial
statements and are included as Appendix I to this prospectus.
Current assets................. $292,608
Non-current assets............. $77,464
Current liabilities............ $10,091
Revenue........................ $0
Operating Expenses............. $1,232,229
Net loss....................... $(1,232,229)
Net loss per share ............ $(.16)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
1. Liquidity and Capital Resources. BioQuest was incorporated on November 4,
1999 in Virginia as a privately held corporation for the purpose of establishing
a business or businesses all allied with the field of alternative medicine. Our
goals are to brand BioQuest as the premiere provider of information, products
and services within the field of alternative medicine. BioQuest has not yet
commenced generating revenue. BioQuest has raised $800,210 through a private
placement to fund 8-12 months of operations. BioQuest intends to raise up to
$14,000,000 in this initial public offering ("IPO") and utilize these funds to
finance operations and execute its business plan.
BioQuest has not yet commenced generating any revenue. BioQuest expects
to fund development expenditures and incur losses until it is able to generate
sufficient income and cash flows to meet such expenditures and other
requirements. BioQuest does not currently have adequate cash reserved to
continue to cover such anticipated expenditures and cash requirements. These
factors, among others, raise substantial doubt about BioQuest's ability to
continue as a going concern. In this regard, see the Independent Certified
Public Accountant's Report appearing elsewhere herein which cites substantial
doubt about BioQuest's ability to continue as a going concern.
2. Plan of Operation. Through June 30, 2001, BioQuest's activities have been
organizational and devoted to developing a business plan, raising capital,
creating its web site, as well as beginning to develop its other subsidiary
operations. Where such costs are indirect and administrative in nature, they
have been expensed in the accompanying statement of operations. Where such costs
relate to capital raising and are both direct and incremental, such costs have
been treated as deferred offering costs in the accompanying balance sheet.
BioQuest can be classified as an "early stage" start-up company with
essentially no operating history and no revenues. Our web site is expected to be
launched concurrent with the date of this prospectus.
-37-
No assurance can be given that our products and services will be
accepted in the marketplace or that there will be sufficient revenues generated
for us to be profitable. Besides the risk factors (see "Risk Factors"),
businesses are often subject to risks not foreseen by management. In reviewing
this prospectus, potential investors should keep in mind other potential risks
that could be important.
BioQuest has developed an action plan geared to varying amounts of
capital being raised. We will structure our operations based on both the amount
of capital raised in the IPO and the timing of the receipt of the proceeds.
Hence, during our initial 12 months of operation, we will devote a significant
portion of our day-to-day operations on marketing, recruiting and retaining key
personnel, planning, well establishing, branding and marketing a variety of
unique products and services.
Specifically, assuming that only $10,000,000 of capital is raised,
BioQuest's goals will be to further develop BatOutOfHealth.com, BioQuest Centre
for Natural and Integrative Medicine, BioQuest Media Resources Group and
BioQuest Seminar Program subsidiaries. If more than more than $10,000,000 up to
a $14,000,000 maximum is raised, BioQuest would devote substantially more
capital to its developing subsidiaries and possible acquisitions in other
businesses allied with the alternative medicine field but not carried on by our
then existing subsidiaries.
Once the offering is completed, BioQuest expects to retain up to 25
full-time employees while continuing, because of the associated efficiency and
cost-effectiveness, to outsource a significant portion of the Website
development to outside firms.
Because BioQuest has no history of operations, there is no assurance
that our business plan can be developed and implemented. As a result, there is
no assurance that revenues will ever be generated sufficient to recover the
capital raised in the IPO, let alone provide a return to shareholders on
invested capital.
3. Forward-looking Statements. Statements contained in this document which are
not historical fact are forward-looking statements based upon management's
current expectations that are subject to risks and uncertainties that could
cause actual results to differ materially from those set forth in or implied by
forward-looking statements.
4. Recent Accounting Pronouncements. There are no recently issued accounting
standards for which the impact on our financial statements at June 30, 2001 is
not known.
ABSENCE OF PUBLIC MARKET
There is no current public trading market for the shares. However, we
will become a reporting company as a result of this offering and we intend to
take needed action to qualify the shares for quotation, upon closing of this
offering, initially on the NASDAQ Over-the-Counter Bulletin Board. There is no
assurance that we can satisfy the current pertinent listing standards or, if
successful in getting qualified, avoid later de-listing. To be NASDAQ
Over-the-Counter Bulletin Board listed requires at least one market-maker to
agree to serve in that capacity based on a submission to NASDAQ, the core of
which is the disclosures in this prospectus and/or subsequent reports required
pursuant to the Securities Exchange Act of 1934. We have not filed our
application for listing but will do so promptly after the date of this
prospectus. Based on prior experience and advice of our securities counsel, we
believe qualification should occur within about two weeks of the closing on this
offering.
DESCRIPTION OF CAPITAL STOCK
Common Stock
We are authorized to issue 25,000,000 shares of common stock, no par
value. For particulars, see "Certain Provisions of Virginia Law" below.
-38-
There has been no established public trading market for our shares. As
of the date of this prospectus, we have 79 shareholders of record owning
9,040,473 outstanding shares of common stock. The bulk of these shares are owned
by our affiliates as detailed in "Securities Ownership of Certain Beneficial
Owners and the Principal Shareholders."
Preferred Stock
We are is authorized to issue 5,000,000 shares of preferred stock, no
par value. Currently there are no issued and outstanding preferred shares of
BioQuest and we do not anticipate any to be issued. As required under pertinent
state regulatory standards, any preferred stock issued to our affiliates will be
on the same terms as it is offered to all other existing shareholders or new
shareholders (unless the issuance of preferred stock is approved by a majority
of our independent directors who did not have an interest in the transaction and
who have access, at our expense, to our or independent legal counsel).
Certain Provisions of Virginia Law
The only classes of stock outstanding at this time are the common
shares. All shares have equal voting rights in all matters to be voted upon by
the stockholders. A majority vote is required on all corporate action.
Cumulative voting in the election of directors is not allowed, which means that
the holders of more than 50% of the outstanding shares can elect all the
directors as they choose to do so and, in such event, the holders of the
remaining shares will not be able to elect any directors. The shares have no
preemptive, subscription, conversion or redemption rights.
In the event of our liquidation, dissolution or winding up, the
shareholders are entitled to share ratably in all assets remaining after payment
of liabilities. There are no redemption or sinking fund provisions or preemptive
rights with respect to the shares, and shareholders have no right to require
us to redeem or purchase shares. Shares can only be issued as fully paid and
non-assessable shares.
Dividend Rights
Each share is entitled to dividends if, as and when our Board of
Directors declares dividends. We intend to retain future earnings for use in its
business and do not anticipate paying any dividends on shares in the foreseeable
future. While not currently so restricted, we may be prohibited from paying
dividends on the shares in the future under credit or other financing
agreement(s) unless certain amounts are available and certain other conditions
are satisfied.
PLAN OF DISTRIBUTION
We propose to offer directly to the public, 1,000,000 shares of our
common stock, to be bid on at a minimum of $10 per share. Investors are advised
that, in our opinion, the final offering price could be higher than $10.00 per
share based on competitive bids received under this offering Dutch Auction
process ("Bids"). It is possible that the Bids could be as high as $14.00 per
share. Of course, the actual price will be determined in accordance with the
Dutch Auction process described below but none will be deemed valid if less than
$10.00 or more than $14.00 per share.
There are no underwriters involved in this offering and we do not
intend to retain brokers to offer our shares. Accordingly, we will receive the
gross proceeds of this offering, a portion of which will be applied to the costs
associated with this offering as described in "Application of Proceeds." The
technology being employed is licensed on a one-time basis from Main Street IPO.
Please note that Main Street IPO is not otherwise involved in the offering other
than as lessor of the technology and the licensed Dutch Auction technology has
not previously been used for an offering of securities.
-39-
We will offer and sell the shares on a best-efforts, self-underwritten
all-or-nothing basis through Roger Miller and/or Peter J. Ewens, executive
officers and directors of our company, who will not be compensated for these
services. Specifically, our personnel will assist in the above-described sales
activities under a safe harbor provided by Rule 3a4-1 promulgated under the
Securities Exchange Act of 1934. Rule 3a4-1 generally provides that an
"associated person of an issuer' of securities shall not be deemed a broker (or
dealer) solely by reason of participation in the sale of securities of such
issuer if the associated person meets certain conditions. Such conditions
include, but are not limited to, that the associated person participating in the
sale of an issuer's securities not be compensated in connection therewith at the
time of participation, that such person not be associated with a broker or
dealer and that such person observe certain limitations on his or her
participation in the sale of securities. For purposes of this exemption,
"associated person of an issuer" is defined to include any person who is a
director, officer or employee of the issuer or a company that controls, is
controlled by or is under common control with the issuer.
The Dutch Auction process to be used in this offering operates as
follows:
1. Upon effectiveness of the registration statement relating to this offering,
we will post the prospectus on our www.bioquestipo.com web site (the "Website").
A copy of our prospectus for this offering in electronic format (the "electronic
prospectus") is available on our separate and special offering Website. The
electronic prospectus has the same content as the paper copy of the prospectus
prepared for the offering. We may also solicit prospective investors by
publicizing the offering through tombstone advertisements and as otherwise
permitted by SEC Rule 134. Any such publications will invite persons interested
in the offering to view a copy of the electronic prospectus on the Website or to
obtain a paper copy of our prospectus by contacting us. Subject to Rule 134
constraints, we may reach additional potential investors by direct mail
(including email) solicitation. All potential investors will be invited to
register on our Website. Registration will require prospective investors to
provide us with their name, address and social security number as well as
certain other basic information. Investors will be able to submit a Bid at any
price the investor chooses, so long as at or above the minimum $10.00 per share
price and less than or equal to the maximum $14.00 per share price. No bids
above or below this bid range will be accepted. We will maintain as
confidential, all bids and other information disclosed.
2. The auction is open for purposes of receiving Bids to purchase 1,000,000
shares being offered. The Bids will specify the number of shares the potential
investor proposes to purchase and the price the investor is willing to pay for
the shares. All Bids must be accompanied by "good funds" (i.e., immediately
available) made payable to BioQuest IPO Escrow Account. Pursuant to an escrow
agreement with us, The American Pacific Bank will act as our escrow agent with
funds escrowed in an escrow account in its Trust Department. American Pacific is
an FDIC-insured, Oregon-chartered bank. TransferOnline, Inc. will serve as our
transfer agent assuming the Dutch Auction 1,000,000 share all-or-nothing minimum
is achieved. TransferOnline will also act as Servicing Agent, an administrative
capacity in all matters regarding investor communications and reporting
regarding the escrow account. If a Bid is submitted and subsequently confirmed,
it may be withdrawn, as described in (5) below, at any time until the auction is
closed.
As indicated, the Bid can be at the $10.00 minimum price or at any
price up to $14.00 per share and no bids below or above that range will be
accepted. Similarly, new or substituted Bids may be placed at any time prior to
the close of the auction. The principal factor in establishing the price the
public pays us for our shares will be the "clearing price" resulting from the
Bid that equals the lowest price set forth in valid firm Bids which "clears" all
1,000,000 shares being offered pursuant to this prospectus. The clearing price
may be equal to or greater than the public offering price set by us, but it will
not be lower. The "clearing price" will also determine the allocation of shares
to successful bidders. All Bids which are below the "clearing price" will be
rejected even if they are higher than the public offering price. If Bids for at
least 1,000,000 shares are not received or the clearing price is not equal to or
greater than the public offering price of $10.00 per share, we will cancel the
offering, possibly filing a post-effective amendment under pertinent federal and
state securities law requirements and conducting a new auction.
The following table illustrates a hypothetical bid for our offering.
The table indicates we would receive aggregate offers to purchase 750,000 shares
at $11 to $14, leaving 250,000 shares of the 1,000,000 shares offered still
available. (These 250,000 shares are deemed the "clearing shares"). Since the
750,000 shares bid at $11 exceed the 250,000 shares available, these shares will
-40-
be allocated among all bidders who bid the 750,000 shares. Since the 250,000
shares available is 33% of the 750,000 shares bid, each bidder at the $11
clearing price would receive 33% of the number of shares they bid for. Thus,
with $11 as the clearing price, this is the price that all successful bidders
from $11 to $14 would pay for each share of stock bid and allocated, and the
gross proceeds to BioQuest would be $11,000,000 (1,000,000 shares x $11/share).
All bids below $11, in this case all 1,000,000 shares bid at $10 per share,
which was the stated minimum public offering price, would be rejected and their
monies would be returned to them from the escrow account.
Number of Shares Aggregate Number of Success % If 1,000,000
Requested By Bidders Bid Price($) Shares at Bid Price and Greater Valid Firm Bids Rec'd
-------------------- ------------ ------------------------------- ---------------------
100,000 14 100,000 100%
100,000 13 200,000 100
150,000 12 350,000 100
400,000 11.50 750,000 100
750,000 11 1,500,000 33.3
1,000,000 10 2,500,000 0
As the above hypothetical bid process illustrates, this Dutch Auction
process will determine the proceeds to the company with the 1,000,000 shares to
be issued, the only variable being the number of valid firm Bids received (and
associated price). The "clearing price" is determined by the algorithm embedded
in the licensed Dutch Auction technology and thus we do not have the ability to
arbitrarily choose. Of course, we do not know how many offers to purchase will
be submitted or what the prices will be for any offers to purchase. The above
hypothetical table is included merely to explain our auction process.
The actual time at which the Dutch Auction closes will be determined by
the algorithm embedded in the licensed Dutch Auction technology based upon
general market conditions during the period immediately following effectiveness
of the registration statement. The algorithm would allow the offering to remain
open as long as bids demonstrate an upward trend and 120 days have not elapsed
since commencement of the offering (the date of this prospectus); however, once
the trend begins to tail off and trend downwards, by a decrease of 10% below the
prior highest bid, notice as outlined in the subsequent paragraph would be given
that bids are no longer being accepted. See (6) below as to how this algorithm
specifically works.
It should be noted that all bidders have the ability to cancel their
bids at any time prior to the close of the Auction, details of which are
addressed in (5) below. Further, just prior to the close of the Auction, each
bidder will be sent a "confirmation" email announcing our intention to close the
Auction, and giving them a final opportunity to withdraw any of their bids from
the Auction. The body of the email will instruct them to go to the
www.bioquestipo.com website and to go to their personal bid file under "My Bid"
where they will have a final opportunity to cancel their bid(s). Each bidder
will be given 24 hours to cancel. Those bids not canceled within the 24 hour
time period, will continue to be valid as an accepted bid and considered for
processing and allocation at the close of the Auction.
The Servicing Agent will not engage in any marketing or soliciting
activities for the offering. Specifically, its personnel are restricted from:
(i) advising potential investors about whether to submit bids and/or the
suitable Bid size or price; (ii) discussing the potential market value of our
stock; or (iii) discussing bidders' personal plans to invest in our stock. The
Servicing Agent's president will supervise its personnel to assure compliance
with these limitations.
3. Once the Auction has officially closed, the Auction process has been
audited and a clearing price has been established, all bidders will be notified
by email as to whether they were a successful or an unsuccessful bidder, and
will be told what the clearing price is. Such communication will be made
pursuant to a finalized prospectus (as defined under pertinent SEC rules) that
discloses the clearing price for all firm valid Bids and the public offering
price. It should also be noted that the price which all bidders will pay will
always be equal to, or less than, what they bid in this process.
As indicated, our licensed software will automatically determine what
is the clearing price as well as the allocation. The Bids and documents
evidencing the Bids to purchase will be maintained by BioQuest through the
Website's licensed technology. American Pacific will hold all funds in escrow
until the closing of the offering, at which time it will close the escrow,
TransferOnline will distribute the appropriate number of common shares to
successful bidders and American Pacific Bank will distribute to us the offering
-41-
proceeds. Any excess funds sent with successful Bids to purchase, and all funds
sent with unsuccessful Bids to purchase, will be returned to those persons or
entities that had excess or unsuccessful bids.
4. As all monies submitted to the Escrow Agent by bidders in conjunction
with bids placed will be held in a non-interest-bearing Escrow Account.
An independent auditor has been engaged to verify and certify that the
auction results are accurate and comply with the rules of the Dutch Auction
process. Bids for fewer than one (1) whole share will not be accepted and no one
bidder may purchase more than 10% of the number of shares accepted.
To cancel a bid at any time, bidders may log onto the
www.bioquestipo.com website, going to our Home Page. Upon following the
indicated instructions, your bid will automatically be "canceled." Specifically,
from the Home Page, the bidder clicks on "IPO Offering" where he or she will be
asked to fill in their Username and Password. The bidder then clicks on the
"Submit" button. He or she is then delivered to the "Welcome to our Offering"
page. From there, the bidder clicks the "My Bids" tab and will be delivered to
that page where he or she can see his or her bids with the instructions that "if
you wish to cancel a bid, click on the Company Name for the specific bid you
wish to cancel." When the bidder clicks on the "Cancel this Bid" button, the bid
is automatically cancelled - indicated in red for that particular bid under the
"My Bids" tab.
No officer, director, promoter, affiliate or associate is expected to
purchase additional shares of our company. If they were to do so, such persons
will be purchasing the securities on the same terms as unaffiliated public
investors and such enumerated class of persons may purchase securities for
purposes of meeting the 1,000,000 share all-or-nothing offering.
5. The algorithm determining when this offering will close works as follows:
(a) As bids are received, a real time tracking mechanism is embedded in
the software which tracks the number of shares being bid for and the
price bid. As bids are being received from multiple bidders, a bid
price and number of shares per bid begin to create a trending
process.
(b) In addition, bids placed initially are put into a "Pending" status
and are not "Accepted" until funds, matching the amount bid, are
received and cleared by the escrow agent. Once accepted status is
achieved, all accepted bids (the only valid bids) are tracked for
trending upward or downward.
(c) Once the threshold of accepted bids for 1,000,000 shares has been
reached, the trending mechanism is in place to determine the point in
time at which our proceeds will be maximized.
(d) The following example illustrates a probable situation, assuming our
$10 minimum and $14 maximum for the 1,000,000 shares all-or-nothing
offering.
Number of Shares Aggregate Number of
Requested by Bidders Bid Price ($) Shares at Bid Price and Greater
-------------------- ------------- -------------------------------
50,000 14 1,450,000
100,000 13.50 1,400,000
200,000 13 1,300,000
100,000 12.50 1,100,000
-----------------------------------------------------------------------------------------------
400,000 12 1,000,000 threshold met
300,000 11.50 600,000
200,000 11 300,000
100,000 10 100,000
(e) In this example, if we assume that the first 1,000,000 shares bid for
and accepted fell between $10 and $12.50 per share, and that
subsequent shares bid and accepted demonstrated an upward trending as
illustrated, the algorithm would allow the offering to remain open as
long as the trend continued and 120 days from the date of this
prospectus have not elapsed. Once the trend began to tail off and
-42-
trend downwards, by a decrease of 10% below the prior highest bid
reached, bids would no longer be accepted.
(f) In fact, at this time, we will inform, via email, all bidders whose
bids have been placed, but whose funds have not been received in
escrow, that they have seven (7) days within which to send their
monies in and have their bids accepted. Once this period has passed,
as above, just prior to the close of the auction, each bidder will be
sent a "confirmation" email announcing our intention to close the
auction and they will be given a final opportunity to withdraw any of
their bids.
(g) Each bidder will be given 24 hours to cancel. Those bids not canceled
within the 24 hour time period, will continue to be valid as an
accepted bid and considered for processing and allocation at the
close of the auction.
(h) In the example above, assuming that no bidders withdrew their bids
and we closed the auction with accepted bids for 1,450,000 shares,
the clearing price, dictated by the algorithm which maximizes the
proceeds to BioQuest, is $12 per share, the price which all bidders
will pay.
(i) If the 1,000,000 share all-or-nothing offering has not been achieved
within 120 days of the date of this prospectus, the Dutch Auction
will be terminated and all funds will be returned to Bidders without
interest.
6. In addition, to comply with certain state regulators' concerns about the
level of capital contributions, our principals, at least Messrs. Ewens and
Miller, have agreed to contribute, in the aggregate, $282,000 in additional
capital for their previously issued shares. These contributions must be made on
or before the date this 1,000,000 share all-or-nothing offering, is successful
or released from escrow. Failure to pay the additional cash capital contribution
will invalidate this Dutch Auction offering.
Price and volume volatility in the market for our common shares may
result from the somewhat unique nature of the proposed plan of distribution.
Price and volume volatility in the market for our common shares after the
completion of this offering may adversely affect the market price of our common
shares, assuming a market does in fact develop.
Prior to the offering, there has been no public market for our common
shares. The initial public offering price for the common shares will be
determined by the process described above and does not necessarily bear any
direct relationship to our assets, current earnings or book value or to any
other established criteria of value, although these factors were considered in
establishing the initial public offering price range. Other factors considered
in determining the initial public offering price range include:
o market conditions;
o the industry in which we operate;
o an assessment of our management;
o our initial operating results;
o our business potential; and
o other factors deemed relevant.
ERISA CONSIDERATIONS
Persons who contemplate purchasing shares on behalf of Qualified Plans
are urged to consult with tax and ERISA counsel regarding the effect of such
purchase and, further, to determine that such a purchase will not result in a
prohibited transaction under ERISA, the Code or a violation of some other
provision of ERISA, the Code or other applicable law. The management and
BioQuest necessarily will rely on such determination made by such persons,
although no shares will be sold to any Qualified Plans if management believes
that such sale will result in a prohibited transaction under ERISA or the Code.
-43-
EXPERTS
The validity of shares being offered by this prospectus will be passed
upon for BioQuest International, Inc. by Carl N.Duncan, Esq., Bethesda,
Maryland. As securities counsel, Mr. Duncan, is being paid for services rendered
through significantly reduced cash compensation and the issuance of warrants to
exercise at $.01 per share the purchase of 15,000 shares for up to three years
after the date of this prospectus.
The financial statements included in this prospectus and in the
Registration Statement have been audited by Hill, Barth and King LLC,
independent certified public accountants, to the extent and for the period set
forth in their report, which contains an emphasis paragraph regarding BioQuest's
ability to continue as a going concern, appearing elsewhere herein and in the
Registration Statement, and are included in reliance upon such report given upon
the authority of said firm as experts in auditing and accounting.
AVAILABLE INFORMATION
BioQuest International, Inc. has filed with the Securities and Exchange
Commission a Registration Statement on Form SB-2 with respect to the securities
offered hereby. This prospectus does not contain all the information set forth
in such Registration Statement, certain portions of which have been omitted
pursuant to the rules and regulations of the SEC. Reference is made to such
Registration Statement, including the amendment(s) and exhibits thereto, for
further information with respect to BioQuest and such securities.
The Registration Statement can be inspected and copied at the public
reference facilities of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549, as well as at the SEC's following regional offices: at Seven World Trade
Centre, 13th Floor, New York, New York 10048; and 500 West Madison, Suite 1400,
Chicago, Illinois 60601. Copies of the Registration Statement can be obtained
from the Public Reference Section of the SEC at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. Moreover, BioQuest has filed
such materials electronically with the SEC; accordingly, such materials can be
accessed through the SEC's Website that contains reports, proxy and information
statements and other information regarding registrants (http// www.sec.gov).
While BioQuest has not previously been subject to the informational and
periodic reporting requirements of the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"), by filing this registration statement, it
immediately becomes subject to Exchange Act requirements to file annual (Form
10-KSB), quarterly (Form 10-QSB) and periodic material reports (Form 8-KSB).
-44-
APPENDIX I
CONSOLIDATED FINANCIAL STATEMENTS
BIOQUEST INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
June 30, 2001 and 2000
- - - o o O o o - - -
C O N T E N T S
P A G E
Independent Auditors' Report - - - - - - - - - - - - - - - - - - - - - I-1
Consolidated Balance Sheets - - - - - - - - - - - - - - - - - - - - - - I-2
Consolidated Statements of Operations - - - - - - - - - - - - - - - - - I-3
Consolidated Statements of Stockholders' Equity - - - - - - - - - - - I-4
Consolidated Statements of Cash Flows - - - - - - - - - - - - - - - - I-5
Notes to Consolidated Financial Statements - - - - - - - - - - - - I-6 - I-9
- - - o o O o o - - -
Board of Directors
BioQuest International, Inc.
Naples, Florida
Independent Auditors' Report
We have audited the accompanying consolidated balance sheets of BioQuest
International, Inc. and its subsidiaries BioQuest International Company Limited
and BioQuest Center for Integrative Medicine Limited (collectively, the Company)
as of June 30, 2001 and 2000 and the related consolidated statements of
operations, stockholders' equity and cash flows for the year ended June 30,
2001, for the period from November 4, 1999 (date of inception) to June 30, 2000
and for the period from November 4, 1999 (date of inception) to June 30, 2001.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with U.S. generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
BioQuest International, Inc. and its subsidiaries as of June 30, 2001 and 2000
and the consolidated results of their operations and their consolidated cash
flows for the year ended June 30, 2001, for the period from November 4, 1999
(date of inception) to June 30, 2000 and for the period from November 4, 1999
(date of inception) to June 30, 2001 in conformity with U.S. generally accepted
accounting principles.
The accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern. As discussed in Note F to the
consolidated financial statements, the Company is in the development stage and
has sustained losses since its inception that raise substantial doubt about its
ability to continue as a going concern. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
/s/ Hill, Barth & King LLC
Certified Public Accountants
Naples, Florida
September 10, 2001
CONSOLIDATED BALANCE SHEETS
BIOQUEST INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
June 30, 2001 and 2000
2001 2000
------------------- -------------------
A S S E T S
Cash - NOTE C $ 142,546 $ 158,104
Receivable from stockholder 3,455 0
Prepaid expenses 0 3,438
Deferred offering costs 146,607 41,000
Premise and equipment - NOTE B 77,464 0
------------------- -------------------
$ 370,072 $ 202,542
=================== ===================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable $ 10,091 $ 500
Stockholders' Equity:
Preferred stock, no par value, 5,000,000 shares
authorized, no shares issued and outstanding 0 0
Common stock, no par value, 25,000,000 shares authorized,
9,040,473 and 8,173,333 shares issued and outstanding
as of June 30, 2001 and 2000, respectively 0 0
Additional paid-in capital 1,592,210 302,000
Deficit accumulated during the development stage (1,232,229) (99,958)
------------------- -------------------
TOTAL STOCKHOLDERS' EQUITY 359,981 202,042
------------------- -------------------
$ 370,072 $ 202,542
=================== ===================
See accompanying notes to consolidated financial statements
I-2
CONSOLIDATED STATEMENTS OF OPERATIONS
BIOQUEST INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
For the year ended June 30, 2001, the period from November 4, 1999 (date of inception)
to June 30, 2000 and the period from November 4, 1999 (date of inception) to June 30, 2001
<s> <c> <c> <c>
Period from Period from
Year ended November 4, 1999 November 4, 1999
June 30, (Inception) to (Inception) to
2001 June 30, 2000 June 30, 2001
----------------- ------------------ --------------------
REVENUE $ 0 $ 0 $ 0
- -------
EXPENSES
- --------
Advertising 9,334 0 9,334
Bank charges 509 144 653
Outside services 18,798 3,099 21,897
Consulting fees 954,637 72,880 1,027,517
Conventions 3,215 250 3,465
Depreciation 19 0 19
Interest expense 233 233 466
Legal and accounting fees 34,782 4,062 38,844
License and permits 925 185 1,110
Meals 7,605 2,761 10,366
Office expense 1,089 5,938 7,027
Postage 5,683 0 5,683
Printing and reproduction 6,314 0 6,314
Contract cancellation fee 15,000 0 15,000
Supplies 6,444 0 6,444
Telephone 10,365 2,566 12,931
Travel 34,559 7,718 42,277
Computer services 22,088 0 22,088
Miscellaneous 672 122 794
----------------- ------------------ --------------------
TOTAL EXPENSES 1,132,271 99,958 1,232,229
----------------- ------------------ --------------------
NET LOSS $(1,132,271) $ (99,958) $ (1,232,229)
================= ================== ====================
NET LOSS PER SHARE $ (0.13) $ (0.02) $ (0.16)
================= ================== ====================
AVERAGE WEIGHTED
SHARES OUTSTANDING 8,748,589 5,278,047 7,584,923
================= ================== ====================
See accompanying notes to consolidated financial statements
I-3
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
BIOQUEST INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
For the year ended June 30, 2001, the period from November 4, 1999 (date of inception)
to June 30, 2000 and the period from November 4, 1999 (date of inception) to June 30, 2001
<s> <c> <c> <c> <c> <c>
DEFICIT
ACCUMULATED
ADDITIONAL DURING STOCK
COMMON PAID-IN DEVELOPMENT SUBSCRIPTION
STOCK CAPITAL STAGE RECEIVABLE TOTAL
----------------- ------------------ ------------------- ------------------ --------------
Balance
November 4, 1999 $ 0 $ 0 $ 0 $ 0 $ 0
Proceeds from issuance
of common stock 0 302,000 0 0 302,000
Net loss from inception to
June 30, 2000 0 0 (99,958) 0 (99,958)
----------------- ------------------ ------------------- ------------------ --------------
Balance (deficit)
June 30, 2000 0 302,000 (99,958) 0 202,042
Proceeds from issuance
of common stock 0 540,210 0 0 540,210
Issuance of common stock
for service 0 750,000 0 0 750,000
Net loss for year ended
June 30, 2001 0 0 (1,132,271) 0 (1,132,271)
----------------- ------------------ ------------------- ------------------ --------------
Balance (deficit)
June 30, 2001 $ 0 $ 1,592,210 $(1,232,229) 0 $ 359,981
================= ================== =================== ================== ===============
See accompanying notes to consolidated financial statements
I-4
CONSOLIDATED STATEMENTS OF CASH FLOWS
BIOQUEST INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
For the year ended June 30, 2001, the period from November 4, 1999 (date of inception)
to June 30, 2000 and the period from November 4, 1999 (date of inception) to June 30, 2001
<s> <c> <c> <c>
Period from Period from
November 4, November 4,
Year ended 1999 1999
June 30, (Inception) to (Inception) to
2001 June 30, 2000 June 30, 2001
--------------- ----------------- -----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (1,132,271) $ (99,958) $(1,232,229)
Adjustments to reconcile net loss to net
cash used in operating activities:
Issuance of common stock for services 750,000 0 750,000
Decrease (increase) in prepaid expenses 3,438 (3,438) 0
Increase in miscellaneous receivables (3,455) 0 (3,455)
Increase in other assets 105,607 (41,000) (146,607)
Increase in accounts payable (9,591) 500 10,091
--------------- ----------------- -----------------
NET CASH USED
IN OPERATING ACTIVITIES (478,304) (143,896) (622,200)
--------------- ----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in website development (76,681) 0 (76,681)
Purchases of premises and equipment (783) 0 (783)
--------------- ----------------- -----------------
NET CASH USED
IN INVESTING ACTIVITIES (77,464) 0 (77,464)
--------------- ----------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 540,210 302,000 842,210
--------------- ----------------- -----------------
NET CASH PROVIDED
BY FINANCING ACTIVITIES 540,210 302,000 842,210
--------------- ----------------- -----------------
NET INCREASE (DECREASE) IN CASH (15,558) 158,104 (142,546)
CASH
Beginning of period 158,104 0 0
--------------- ----------------- -----------------
End of period $ (142,546) $ 158,104 $ (142,546)
=============== ================= =================
See accompanying notes to consolidated financial statements
I-5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
BIOQUEST INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
June 30, 2001 and 2000
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization:
BioQuest International, Inc. (the Company) was incorporated under the laws of
the State of Virginia on November 4, 1999. The Company's activities to date have
been limited to the organization of the Company and its subsidiaries, as well as
preparation for a maximum $14,000,000 common stock offering (the Offering). A
substantial portion of the Offering will be used by the Company to provide the
initial capitalization of the subsidiaries and for future acquisitions.
The consolidated financial statements of the Company include the accounts of the
Company and its wholly-owned subsidiaries, BioQuest International Company
Limited and BioQuest Center for Integrative Medicine Limited. The wholly-owned
subsidiaries are Bahamian Corporations. There has been no activity or assets
purchased by these companies.
Nature of Business:
The Company was formed to create, design, establish, build and operate
wholly-owned subsidiaries allied with and providing alternative, complementary
and integrative medical services as well as a comprehensive internet portal
focused on medicine in the world.
Use of Estimates:
The preparation of financial statements, in conformity with U.S. generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Deferred Offering Costs:
Deferred offering costs consist primarily of licensing, legal and accounting
fees related to the initial public stock offering and will be offset against the
offering proceeds when received.
Premises and Equipment:
Premises and equipment are stated at cost less accumulated depreciation.
Depreciation is computed on the straight-line method over the estimated useful
lives of the depreciable assets.
Income Taxes:
Provisions for income taxes are based on taxes payable or refundable for the
current year and deferred taxes on temporary differences between the amount of
taxable income and pretax financial income and between the tax basis of assets
and liabilities and their reported amounts in the financial statements. Deferred
tax assets and liabilities are included in the financial statements at currently
enacted income tax rates applicable to the period in which the deferred tax
assets and liabilities are expected to be realized or settled.
I-6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
BIOQUEST INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
June 30, 2001 and 2000
NOTE B - PREMISE AND EQUIPMENT
In accordance with Emerging Issues Task Force Consensus #00-2 only the following
costs associated with Website Development have been capitalized by the
corporation: web site application and infrastructure development, development or
acquisition of software tools for development work, development or acquisition
of software necessary for general web site operations, development or
acquisition of customized code for web applications, development or acquisition
of database software, develop HTLM web pages, create hypertext links to other
websites, create graphics and enter initial content into the web site.
Depreciation has not been computed on website development costs since this asset
has not been placed into operation. Depreciation will be computed using the
straight-line method over the estimated useful life of the asset.
Depreciation expense was $19, and $0 for the year ended June 30, 2001 and the
period ended June 30, 2000, respectively.
NOTE C - CONCENTRATIONS OF CREDIT RISK
The Company maintains its cash balances at various financial institutions
located in Naples, Florida and Fairfax, Virginia. These balances are insured by
the Federal Deposit Insurance Corporation up to $100,000. At June 30, 2001 and
2000 uninsured amounts held at these financial institutions total $11,215 and
$40,514, respectively.
NOTE D - INCOME TAXES
Deferred taxes are recognized for temporary differences between the basis of
assets and liabilities for financial statement and income tax purposes. The tax
effect of the differences that gave rise to a deferred tax asset of $431,280 and
$34,985 and corresponding valuation allowance of ($431,280) and ($34,985) at
June 30, 2001 and 2000, respectively relate primarily to the capitalization of
pre-operating start-up costs which are amortized over a five year term from the
date operations commence for tax purposes.
I-7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
BIOQUEST INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
June 30, 2001 and 2000
NOTE E - RELATED PARTY TRANSACTIONS
Under an oral agreement, the Company paid consulting fees to Peter Ewens, the
Chief Executive Officer, totaling $108,025, $70,080 and $178,105 for the year
ended June 30, 2001 and for the periods from November 4, 1999 to June 30, 2000
and from November 4, 1999 to June 30, 2001, respectively. These payments are
anticipated to continue until the commencement of his employment agreement (see
Note G).
Roger Miller, the Chief Financial Officer, is also a partner in the consulting
firm of Miller & Associates, Inc. During the period, Miller & Associates, Inc.
incurred expenses for supplies and other office related functions for the
Company. Miller & Associates, Inc. was reimbursed by the Company for all
expenses incurred on the Company's behalf, totaling $11,689, $1,384 and $13,073
for the year ended June 30, 2001 and for the period from November 4, 1999 to
June 30, 2000 and from November 4, 1999 to June 30, 2001, respectively.
During the year ended June 30, 2001 the Company issued 500,000 shares of common
stock to two employees for services rendered during the period from July 2000
through October 2000. The compensation expense recorded for these services
equaled $750,000.
NOTE F - GOING CONCERN
As shown in the accompanying consolidated financial statements, the Company
incurred a net loss of $482,229 and $382,271 during the development stage from
November 4, 1999 (date of inception) to June 30, 2001 and the year ended June
30, 2001, respectively. The ability of the Company to continue as a going
concern is dependent on a successful public offering of the Company's common
stock and the Company's ability to generate sufficient revenue from future
operations. The consolidated financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
NOTE G - COMMITMENTS
The Company has entered into two separate contracts to develop an Internet
website. Under the contracts, the Company has agreed to make future payments
totaling $5,000 in cash and $16,000 payable in stock. These amounts are not due
until services are provided in future months and, therefore, are not included in
accounts payable as of June 30, 2001.
The Company has entered into an agreement with an individual to provide public
relations services to the Company. Under the agreement, the Company has agreed
to compensate the individual with 5,000 shares of the Company's common stock.
The shares will be issued upon the registration of the Company's common stock
with the Securities and Exchange Commission (SEC).
I-8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
BIOQUEST INTERNATIONAL, INC. AND SUBSIDIARIES
(A Development Stage Company)
June 30, 2001 and 2000
NOTE G - COMMITMENTS (CONTINUED)
The Company has entered into employment agreements commencing on October 15,
2000 and expiring on October 14, 2005 with four executive officers providing for
annual compensation aggregating $640,000. Payments made under these agreements,
for the year ended June 30, 2001 have been included under consulting fee
expense.
NOTE H - STOCK PURCHASE WARRANTS
The Company has agreed to grant Stock Purchase Warrants in consideration for
certain legal services provided to the Company. The Company intends to issue
warrants, which will entitle the holder to purchase 15,000 shares of common
stock. The Warrants will vest immediately commencing on the date of grant. The
warrants may be exercised in whole or in part for $0.01 per share beginning on
the date of initial registration of the Company's common stock with the SEC and
expiring three (3) years after that date.
I-9
APPENDIX II
DUTCH AUCTION BID PROCESS WEBSITE
WELCOME SCREENS
The following screenshots from the BioQuestipo.com website have been categorized
for viewing in hardcopy format.
[BioQuest Logo Graphic] Help | Bid Now
[Home] [Abut Us] [IPO Offering] [Register]
(Register here)
About BioQuest IPO.com
Getting Started
FAQs Welcome to the BioQuest International, Inc.
Direct Public Offering Website.
Contact Us
This entire website is part of the BioQuest prospectus that
BioQuest has filed with the Securities and Exchange
Commission.
The purpose of this site is to allow you, the individual
investor, to invest directly in our company without large
brokerage fees or opening a brokerage account.
We will conduct our self underwritten, all-or-nothing
1,000,000 share, Direct Public Offering (DPO) using a Dutch
Auction of our registered shares on this site.
We invite you to learn more about BioQuest's business and
for the future by, registering and accessing our
Prospectus.
[Verisign Logo]
To request a hard copy of the BioQuest Prospectus click
on Contact Us.
| Privacy Statement | Legal Disclaimer |
| Home | About Us | IPO Offering | Help | Contact Us |
Copyright (c) 2001 BioQuest International, Inc. All rights reserved
II-1
[BioQuest Logo Graphic] Help | Bid Now
[Home] [Abut Us] [IPO Offering] [Register]
(Register here)
About BioQuest IPO.com
Getting Started
FAQs Getting Started
Contact Us Getting started on BioQuestIPO.com is simple. To find out
about who we are and what we do, read all about us.
We also recommend you that you begin by reading the
Investors' Frequently Asked Questions. This will give you
all the basic information you need, from defining an IPO
and/or DPO to teaching you how BioQuest's Dutch Auction
offering works.
You can become a registered user of BioQuestIPO.com by going
to the registration page and submitting your information.
After you have accessed the tutorial and the prospectus, you
are ready to place your bid!
Registering for BioQuestIPO.com is absolutely free! There
are no hidden charges, and there is absolutely no
obligation. There are never any membership fees, ever.
In order to begin, please access our preliminary prospectus
to learn more about BioQuest's offering, click here to
register.
[Verisign Logo]
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Copyright (c) 2001 BioQuest International, Inc. All rights reserved
II-2
REGISTRATION SCREENS
[BioQuest Logo Graphic] Help | Bid Now
[Home] [Abut Us] [IPO Offering] [Register]
(Register here)
About BioQuest IPO.com
Getting Started
FAQs
Contact Us
User Registration
Please enter your information below.
Items marked with a red asterisk (*) are required.
Choose a
username:* [ ] Must have at least 4 characters
Password:* [ ]
Please create a password with at least 6 characters
including numbers.
e.g. "abcde6"
Reenter
Password:* [ ]
Keyword:* [ ]
If you lose your password, we will ask you for your "keyword".
(e.g. Mother's Maiden name)
-------------------------------------
[Verisign Logo]
Courtesy
Title:* [ Mr. ]
First Name:* [ ] e.g. "John"
Last Name:* [ ] e.g. "Smith"
Email Address:* [ ] e.g.
"someone@somedomain.com"
Street Address 1:*[ ]
Street Address 2:*[ ]
City:* [ ]
State:* [ AL ]
Zip:* [ ]
Country:* [ USA ]
Telephone Number:* Area Code ( ) Tel. No. [ ]-[ ]
International Info.* Country Code:* [ ] Province [ ]
*International Residents Only
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Gender: [ ]
Age: [ ]
Occupation: [ ]
Annual Income: [ ]
How did you learn about us: [ ]
How many hours per week do you
spend online? [ ]
If you have an online brokerage
account, who is your broker? [ ]
How many trades do you make
per week? [ ]
Click here to finish registration |=>
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Copyright (c) 2001 BioQuest International, Inc. All rights reserved
II-4
[BioQuest Logo Graphic] Help | Bid Now
[Home] [Abut Us] [IPO Offering] [Register]
(Register here)
About BioQuest IPO.com
Getting Started
FAQs
Contact Us
User Registration
You must supply a username
[Verisign Logo]
II-5
[BioQuest Logo Graphic] Help | Bid Now
[Home] [Abut Us] [IPO Offering] [Register]
(Register here)
About BioQuest IPO.com
Getting Started
FAQs
Contact Us
User Registration
You must supply a password with at least 6 characters
[Verisign Logo]
II-6
[BioQuest Logo Graphic] Help | Bid Now
[Home] [Abut Us] [IPO Offering] [Register]
(Register here)
About BioQuest IPO.com
Getting Started
FAQs
Contact Us
User Registration
You must supply a hint answer
[Verisign Logo]
II-7
[BioQuest Logo Graphic] Help | Bid Now
[Home] [Abut Us] [IPO Offering] [Register]
(Register here)
About BioQuest IPO.com
Getting Started
FAQs
Contact Us
User Registration
You must supply your first name
[Verisign Logo]
II-8
[BioQuest Logo Graphic] Help | Bid Now
[Home] [Abut Us] [IPO Offering] [Register]
(Register here)
About BioQuest IPO.com
Getting Started
FAQs
Contact Us
User Registration
You must supply your last name
[Verisign Logo]
II-9
[BioQuest Logo Graphic] Help | Bid Now
[Home] [Abut Us] [IPO Offering] [Register]
(Register here)
About BioQuest IPO.com
Getting Started
FAQs
Contact Us
User Registration
You must supply your email address
[Verisign Logo]
II-10
[BioQuest Logo Graphic] Help | Bid Now
[Home] [Abut Us] [IPO Offering] [Register]
(Register here)
About BioQuest IPO.com
Getting Started
FAQs
Contact Us
User Registration
You must supply your street address
[Verisign Logo]
II-11
[BioQuest Logo Graphic] Help | Bid Now
[Home] [Abut Us] [IPO Offering] [Register]
(Register here)
About BioQuest IPO.com
Getting Started
FAQs
Contact Us
User Registration
You must supply your city
[Verisign Logo]
II-12
[BioQuest Logo Graphic] Help | Bid Now
[Home] [Abut Us] [IPO Offering] [Register]
(Register here)
About BioQuest IPO.com
Getting Started
FAQs
Contact Us
User Registration
You must supply your state
[Verisign Logo]
II-13
[BioQuest Logo Graphic] Help | Bid Now
[Home] [Abut Us] [IPO Offering] [Register]
(Register here)
About BioQuest IPO.com
Getting Started
FAQs
Contact Us
User Registration
You must supply your postal code
[Verisign Logo]
II-14
[BioQuest Logo Graphic] Help | Bid Now
[Home] [Abut Us] [IPO Offering] [Register]
(Register here)
About BioQuest IPO.com
Getting Started
FAQs
Contact Us
User Registration
You must supply your area code and phone number
[Verisign Logo]
II-15
[Confirmation Eail Sent to New Registrant]
From: info@bioquestipo.com
To: Jeannie Nelson
Sent: Date and Time
Subject: Confirmation Email
================================================================================
Dear Jeannie:
Welcome to the BioQuest International, Inc. family and thank you for your
interest in learning about our Direct Public Offering. You have just become part
of history-making in progress, as BioQuest is the first company ever to offer
stock to the public on a self-underwritten basis (Direct Public Offering), over
the Internet and using the Dutch Auction process. We're so happy to have you as
our newest member.
Please be sure to record the following information and keep it in a secure
location as a ready reference when you visit us again:
Username: JEANNIE123
Keyword: Mrs. Nelson
Again, thank you for your interest in BioQuest International, Inc, and we look
forward to having you as one of our valued shareholders.
Sincerely,
Peter J. Ewens
President and CEO
BioQuest International, Inc
If you lose or forget your password please go to
http://www.bioquestipo.com/hint.asp
II-16
[BioQuest Logo Graphic] Help | Bid Now
[Home] [Abut Us] [IPO Offering] [Register]
User Registration
Thank you for registering with BioQuest.com
Please take note of the following information:
Username:Jeannie123
Keyword: Mrs. Nelson
Click here to proceed
----------
[Verisign Logo]
| Privacy Statement | Legal Disclaimer |
| Home | About Us | IPO Offering | Help | Contact Us |
Copyright (c) 2001 BioQuest International, Inc. All rights reserved
II-17
[Verisign Graphic]
WWW.BIOQUESTIPO.COM is a VeriSign Secure Site
Security remains the primary concern of on-line consumers. The Verisign Secure
Site Progrm allows you to learn more about web sites you visit before you submit
any confidential information. Please verify that the information below is
consistent with the site you are visiting.
Name: WWW.BIOQUESTIPO.COM
Status: Valid
Validity Period 08-Nov-2001 - Nov 2002
Country = US
State = Virginia
Locality = Fairfax
Server ID Organization Unit = BioQuest International Inc
Information Organization Unit = web services
Organization Unit = Terms of use at www.verisign.com/rpa (c) 00
Common Name = www.bioquestipo.com
If the information is correct, you may submit sensitive data (e.g. credit card
numbers) to this site with the assurance that:
* This site is a VeriSign Secure Server ID
* Verisign has verified the organizational name and that BIOQUEST
INTERNATIONAL INC has the proof of right to use it
* This site legitimately runs under the auspices of BIOQUEST INTERNATIONAL INC
* All information sent to this site, if in a SSL session, is encrypted,
protecting against disclosure to third parties
To ensure that this is a legitimate VeriSign Secure Site, make sure that:
1. The original URL of the site you are visiting comes from
WWW.BIOQUESTIPO.COM
2. The URL of this page is https://digitalid.verisign.com
3. The status of the Server ID is Valid
II-18
BIDDING SCREENS
[BioQuest Logo Graphic] Help | Bid Now
[Home] [My Profile] [ IPO Offering] [My Bids] [Contact Us]
Welcome to our Offering!
Message Center
Have any questions? Refer to the Budding Tutorial
----------------
You may Update your Profile at any time.
-------------------
Open Auction
Company Prospectus Auction
BioQuestIPO.com Download Access
PDF File Prospectus &
Bid
Each time you place a bid for shares you must access the company's prospectus.
To download a PDF file of the prospectus only, click the Download PDF File link.
To access the HTML version of the prospectus and proceed to the bidding screens,
click the Access Prospectus & Bid link.
It is our goal to encourage prudent investing and we want every bidder to
carefully evaluate our company so that they can make educated bids. You must
click on the "Access the Prospectus & Bid" link, access the prospectus and then
click on the "Yes" box at the end of the prospectus signifying that you have
access the prospectus and wish to place a bid. You will then have access to the
bidding pages.
Before you place any bids, however, you must review the Bidding Tutorial which
contains your State and Individual Qalification information.
| Privacy Statement | Legal Disclaimer |
| Home | About Us | IPO Offering | Help | Contact Us |
Copyright (c) 2001 BioQuest International, Inc. All rights reserved
II-19
[BioQuest Logo Graphic] Help | Bid Now
[Home] [My Profile] [ IPO Offering] [My Bids] [Contact Us]
(Register here)
About BioQuest IPO.com Prospectus Qualifier
Getting Started
FAQs You must read the bidding tutorial before
placing a bid. Please click here.
----
Contact Us
| Privacy Statement | Legal Disclaimer |
| Home | About Us | IPO Offering | Help | Contact Us |
Copyright (c) 2001 BioQuest International, Inc. All rights reserved
[VeriSign Logo]
II-20
[BioQuest Logo Graphic] Help | Bid Now
[Home] [My Profile] [ IPO Offering] [My Bids] [Contact Us]
BIOQUEST IPO STATE QUALIFICATION AND SUITABILITY REQUIREMENTS
States Where Shares are Now Offered
and From Which Bids May Be Accepted
(Bids are valid only in states where we are currently qualified)
These shares were registered with the SEC November 9, 2001 pursuant to the
Securities Act of 1933. As of this date, the shares have been qualified for sale
ONLY in the following states:
Colorado Connecticut Delaware District of Columbia Florida
Georgia Illinois Indiana Kentucky Maryland
Massachusetts Michigan Missouri Nevada New Jersey
New York Ohio South Carolina Texas Virginia
Washington Wisconsin
Only bona fide residents from these states may make bids. Residents of any other
states are ineligible to bid.
States Where Qualification is Pending
If you are a resident of a state not listed as qualified, it means we have
not yet filed in your state at this time. However, should we see sufficient
investor interest from one or more of the states pending qualification, we may,
at that time, file in those states. Once your state has been qualified, BioQuest
will email you, informing you of your state's qualification and inviting you, at
that time, to return to bioquestipo.com to bid on shares.
As of this date, qualification if the shares is pending in the following
states:
Arizona Oregon Pennsylvania
Suitability Requirements
Except as required in specific states (see (3) below), there is no
across-the-board suitability standard because, among other reasons, the minimum
investment is so small (one share at a bid of $10 - $14). Bidders in the
following states, in which shares are qualified for sale, are subject to greater
net worth, annual income and other financial requirements as shown below:
I understand that the investment requirements, as to net worth ("NW")
(exclusive of home, furnishings and automobiles) and past and anticipated annual
income ("AI") set forth below opposite the state in which I purchase, apply to
my bid:
Arizona $400,000 NW OR $150,000 AI* (or $200,000 when combined with spouse)
==================================================================================
Maryland $150,000 NW OR $65,000 NW and $65,000 AI
==================================================================================
Missouri* $150,000 NW OR $65,000 NW and $65,000 AI
==================================================================================
New Jersey** Accredited investors (as defined below) only.
==================================================================================
Ohio* $150,000 NW and $65,000 AI
==================================================================================
Pennsylvania* $150,000 NW OR $65,000 NW and $65,000 AI
==================================================================================
Texas* $150,000 NW OR $65,000 NW and $65,000 AI
==================================================================================
Washington $150,000 NW OR $65,000 NW and $65,000 AI
==================================================================================
* But in no case may an investment by bidders from these states represent
more than 10% of their net worth.
** For the purpose of satisfying requirements in certain state(s), only
"accredited investors" as defined are permitted to place bids. Accredited
investors, if individual(s) must either (i) have (along with his/her
spouse) a net worth which exceeds $1,000,000 at the time of the purchase or
(ii) have had an individual income in excess of $200,000 in the previous
two tax years (or joint income which exceeds $300,000) and has a reasonable
expectation of reaching the same income level (or joint income level) in
2002. Accredited investors also include: (i) any bank or savings and loan
associated acting in its individual or fiduciary capacity, any
broker-dealer, any insurance company, investment company, business
development company, small business investment company or employee benefit
plan; if the latter, investment decisions are made for the plan by a
fiduciary which is a bank, savings and loan association, insurance company
or registered investment advisor; (b) the plan has total assets in excess
of $5,000,000; and (c) if a self-directed plan, the investment decisions
II-21
are made solely by persons that are accredited investors; (i) any private
business development company; (ii) any organization (corporation,
Massachusetts or similar business trust or partnership) under Section
501(c)(3) of the Internal Revenue Code not formed for the specific purpose
of acquiring the securities offered with and which has total assets in
excess of $5,000,000 and whose purchase is directed by a "sophisticated"
investor; (iii) any director or executive officer of the company; and/or
(iv) any entity in which all equity owners are accredited investors.
I certify that I have reviewed the state and suitability qualifications for
placing a bid for shares and meet the suitability requirements listed for the
state in which I live. (If there is no suitability standard qualification listed
for your state, please check the "Yes" box.)
[ ] Yes [ ] No
[Continue]
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Copyright (c) 2001 BioQuest International, Inc. All rights reserved
Copyright 2001 BioQuest International, Inc. All rights reserved
II-22
Sorry, at the present time, we cannot accept a bid from this state. Once your
state has been qualified, we will notify you by email, inviting you to return to
bioquestipo.com to bid on shares. You may, at this time, download a PDF file of
the prospectus by clicking on the link below.
You may, however download a PDF file of the prospectus by clicking on the link
below.
Click here to download a PDF File of the prospectus.
----------
Close Window
------------
II-23
Thank you for your interest i BioQuestIPO.com. We are sorry but you do not meet
the suitability requirements outlined for investors for your state and therefore
cannot place a bid for shares. For more information about BioQuest
International, Inc., please see "About Us" on this website or visit us at
BatOutOfHealth.com.
Close Window
------------
II-24
[BioQuest Logo Graphic] Help | Bid Now
[Home] [My Profile] [ IPO Offering] [My Bids] [Contact Us]
You must read the bidding tutorial
before placing a bid. Please click here.
----
[First page of Downloaded Prospectus]
BioQuest.com Prospectus
PROSPECTUS
1,000,000 Shares of Common Stock
($10,000,000 if Sold at $10.00 per Share
and $14,000,000 if Sold at $14.00 per Share)
BIOQUEST INTERNATIONAL, INC.
BioQuest International, Inc. is making this offering of 1,000,000 of its
shares of common stock on a best-efforts, self-underwritten, Dutch Auction,
all-or-nothing basis.
During this offering, shares are being offered at $10.00 per share minimum
but, because of the Dutch Auction process being employed, purchasers may pay a
price of up to $14.00 per share.
If a minimum of 1,000,000 of shares is not sold during this offering (up to
120 days from the date of this prospectus), investor funds relating to the
shares will be promptly returned without interest.
These are speculative securities. You should purchase these securities only
if you can afford a complete loss of your investment. See "Risk Factors" and
"Absence of Public Market" for certain factors that should be considered by
prospective investors, including risks relating to our current financial
condition and there is currently no market for the shares.
These securities have not been approved or disapproved by the Securities
and Exchange Commission or any state securities commission nor has the
Securities and Exchange Commission or any state securities commission passed
upon the accuracy or adequacy of this prospectus. Any representation to the
contrary is a criminal offense.
The date of this Prospectus is November 9, 2001
II-25
[Final page of the prospectus]
BIOQUEST INTERNATIONAL, INC.
1,000,000 Shares of Common Stock
PROSPECTUS
November 9, 2001
Until December 4, 2001 (25 days after the date hereof), all dealers effecting
transactions in the registered securities, whether or not participating in this
distribution, may be required to deliver a current copy of this prospectus. This
delivery requirement is in addition to the obligation of dealers to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations not contained in this prospectus in
connection with the offering covered by this prospectus. If given or made, such
information or representation must not be relied upon as having been authorized
by BioQuest. This prospectus does not constitute as an offer to sell, or a
solicitation of an offer to buy, the common stock in any jurisdiction where, or
to any person to whom, it is unlawful to make such offer or solicitation.
- --------------------------------------------------------------------------------
Once you have access the prospectus, you may place a bid for the company's
shares by indicating below.
I HAVE ACCESSED THE PROSPECTUS OF THE COMPANY OFFERING ITS SHARES FOR SALE AND
WISH TO PLACE A BID.
() Yes () No
[Place a Bid]
II-26
[BioQuest Logo Graphic] Help | Bid Now
[Home] [My Profile] [IPO Offering] [My Bids] [Contact Us]
BioQuestIPO.com:Bid BioQuestIPO.com Info
Total shares 1,000,000
offered:
Minimum Bid: $10.00
Closing Date: Mar 9,2002
17:30
Dear Frodo Baggins,
Please fill in the number of shares you would like to purchase, and the price
that you are willing to pay per share. Remember, this is a Dutch Auction which
fills from the highest bid to the lowest bid.
Please note that bids submitted after 5:00 PM Eastern Time will not Be processed
until the end of the following business day.
(1) Enter Bid
Number of shares: (?) [ ] (2) Payment/Delivery
Price Per Share: (?) [ ] (3) Confirm
Total: (?) $[ ] (4) Finish
Next ==>
Click on (?) icons for help
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Copyright (c) 2001 BioQuest International, Inc. All rights reserved
II-27
[BioQuest Logo Graphic] Help | Bid Now
[Home] [My Profile] [IPO Offering] [My Bids] [Contact Us]
The number of shares bid is invalid
II-28
[BioQuest Logo Graphic] Help | Bid Now
[Home] [My Profile] [IPO Offering] [My Bids] [Contact Us]
You must bid at least the minimum price.
II-29
[BioQuest Logo Graphic] Help | Bid Now
[Home] [My Profile] [IPO Offering] [My Bids] [Contact Us]
The bid information you have entered is incorrect.
Please click here to change your bid
II-30
[BioQuest Logo Graphic] Help | Bid Now
[Home] [My Profile] [IPO Offering] [My Bids] [Contact Us]
BioQuestIPO.com:Payment/Delivery BioQuestIPO.com Info
Total shares 1,000,000
offered:
Minimum Bid: $10.00
Closing Date: Mar 9,2002
17:30
Dear Frodo Baggins,
Please choose the payment method you would like to (1) Enter Bid
use to Purchase these shares.
(2) Payment/Delivery
You must also indicate a delivery method for
your share certificates. (3) Confirm
Please note bids will not be accepted until after (4) Finish
payment has been received by the Escrow Agent. Until
your money is received by the Escrow Agent, your bid
is not official. The auction is subject to close
As determined by the algorithm embedded in the Dutch
Auction Technology being used. If the auction ends
before your payment has been received, your bid will
automatically be canceled.
Payment Method: (?) [ List of Available Payment methods] v]
| Click here| to set up additional payment methods
Delivery Method: (?) [ List of Available Delivery methods] v]
| Click here| to set up additional certificate delivery methods
<== Back Next ==>
Click on (?) icons for help
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II-31
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You have not entered Payment Method.
Please add your payment information to continue
Please click here to go back.
-----
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Payment Methods
Please choose which payment method you would like to add to your
Account.
(You must have at least one payment method set up before you can
complete a bid.)
|Certified Cashier's Check or Money Order|
|Wire Transfer|
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Payment Methods: Bank Check or Money Order
If you would like to pay with either a certified cashier's check or a money
Order, you may do so by sending either one to the following address:
The American Pacific Bank
BioQuest IPO Escrow Account
Attn: Richard Cheong
315 S.W. Fifth Avenue -- Suite 201
Portland, Oregon 97204
IMPORTANT: You must write your unique bid number (?) on your certified cashier's
check or money order, and include the invoice which appears when you have
finished placing your bid. If you do not write your unique bid number (?) on
your payment, your bid will be rejected.
[Next]
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Payment Methods: Wire Transfer
If you would like to pay via a wire transfer, you may do so using the
information below.
IMPORTANT: You must include your unique bid number (?) on your wire transfer.
You may include this as one of the additional "Comment" fields on your wire
transfer. Ask your bank for more information. If you do not write your unique
bid number on your payment, your bid will be rejected.
We also ask that you provide us with the following information. This will help
us identify funds in case they are sent incorrectly.
_______________________________________________________________________
My Account Information:
Bank Name: [ ]
Name on Account: [ ]
Bank Account Number: [ ]
Bank Routing (ABA) Number: [ ]
[Next] [Reset]
- --------------------------------------------------------------------------------
Looking for the ABA and Account Number?
Look on one of your checks for the account you would like us to debit. Both the
Bank Routing (ABA) and Account numbers appear on the bottom of the check, as
indicated below:
[Graphic of a check indicating where the ABA and Account Numbers are.]
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EDIT WIRE TRANSFER
The following fields are incomplete or incorrect:
* Wire Transfer Bank Name
* Wire Transfer Bank Account Name
* Wire Transfer Bank Account No.
* Wire Transfer Routing No.
Please click back and fill them completely/correctly.
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The following fields are incomplete or incorrect:
* Wire Transfer Bank Name
Please click back and fill them completely/correctly.
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The following fields are incomplete or incorrect:
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The following fields are incomplete or incorrect:
* Wire Transfer Bank Routing No.
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The following fields are incomplete or incorrect:
* Wire Transfer Bank Name
* Wire Transfer Bank Account Name
Please click back and fill them completely/correctly.
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The following fields are incomplete or incorrect:
* Wire Transfer Bank Name
* Wire Transfer Bank Account No.
Please click back and fill them completely/correctly.
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The following fields are incomplete or incorrect:
* Wire Transfer Bank Name
* Wire Transfer Bank Routing No.
Please click back and fill them completely/correctly.
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The following fields are incomplete or incorrect:
* Wire Transfer Bank Account Name
* Wire Transfer Bank Account No.
Please click back and fill them completely/correctly.
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The following fields are incomplete or incorrect:
* Wire Transfer Bank Account No.
* Wire Transfer Bank Routing No.
Please click back and fill them completely/correctly.
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II-45
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Your payment information has been updated successfully.
Click [here] to continue in bidding process.
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II-46
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BioQuestIPO.com:Bid BioQuestIPO.com Info
Total shares 1,000,000
offered:
Minimum Bid: $10.00
Closing Date: Mar 9,2002
17:30
Dear Frodo Baggins,
Please choose the payment method you would like to use to
Purchase these shares.
You must also indicate a delivery method for your (1) Enter Bid
share certificates. Please note bids will
not be accepted until after payment has been (2) Payment/Delivery
received by the Escrow Agent. Until your money is
received by the Escrow Agent, your bid is not official. (3) Confirm
The auction is subject to close As determined by the
algorithm embedded in the Dutch Auction Technology being (4) Finish
used. If the auction ends before your payment has Been
received, your bid will automatically be canceled.
Payment Method: (?) [ Wire Transfer v]
| Click here| to set up additional payment methods
Delivery Method: (?) [ List of Available Delivery methods v]
| Click here| to set up additional certificate delivery methods
<== Back Next ==>
Click on (?) icons for help
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II-47
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You have not entered a Delivery Method.
Please add your delivery information to continue.
Please click here to go back.
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Delivery Methods
Please choose which delivery method you would like to add to your
account.
(You must have at least one delivery method set up before you can
complete a bid.)
Held By Transfer Agent
----------------------
Brokerage Account
-----------------
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_____________________________
Held By Transfer Agent
_____________________________
No Information Necessary
_____________________________
[Next] [Reset]
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_____________________________
Brokerage Account
_____________________________
Brokerage Name: [ ]
Broker Name:*[ ]
Name on Account: [ ]
Account 3: [ ]
______________________________
[Next] [Reset]
*Optional
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[BioQuest Logo Graphic] Help | Bid Now
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EDIT WIRE TRANSFER
The following fields are incomplete or incorrect:
. Brokerage Name
. Name on Account
. Brokerage Account #
Please click back and fill them in completely/correctly.
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II-52
[BioQuest Logo Graphic] Help | Bid Now
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EDIT WIRE TRANSFER
The following fields are incomplete or incorrect:
. Brokerage Name
Please click back and fill them in completely/correctly.
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II-53
[BioQuest Logo Graphic] Help | Bid Now
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EDIT WIRE TRANSFER
The following fields are incomplete or incorrect:
. Name on Account
Please click back and fill them in completely/correctly.
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II-54
[BioQuest Logo Graphic] Help | Bid Now
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EDIT WIRE TRANSFER
The following fields are incomplete or incorrect:
. Brokerage Account #
Please click back and fill them in completely/correctly.
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II-55
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EDIT WIRE TRANSFER
The following fields are incomplete or incorrect:
. Name on Account
. Brokerage Account #
Please click back and fill them in completely/correctly.
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EDIT WIRE TRANSFER
The following fields are incomplete or incorrect:
. Brokerage Name
. Name on Account
Please click back and fill them in completely/correctly.
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II-57
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EDIT WIRE TRANSFER
The following fields are incomplete or incorrect:
. Brokerage Name
. Brokerage Account #
Please click back and fill them in completely/correctly.
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II-58
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EDIT WIRE TRANSFER
Your delivery information has been updated successfully.
Click [here] to continue in bidding process.
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BioQuestIPO.com:Payment/Delivery BioQuestIPO.com Info
Total shares 1,000,000
offered:
Minimum Bid: $10.00
Closing Date: Mar 9,2002
17:30
Dear Frodo Baggins,
Please choose the payment method you would like to (1) Enter Bid
use to Purchase these shares.
(2) Payment/Delivery
You must also indicate a delivery method for
your share certificates. (3) Confirm
Please note bids will not be accepted until after (4) Finish
payment has been received by the Escrow Agent. Until
your money is received by the Escrow Agent, your bid
is not official. The auction is subject to close
As determined by the algorithm embedded in the Dutch
Auction Technology being used. If the auction ends
before your payment has been received, your bid will
automatically be canceled.
Payment Method: (?) [ Wire Transfer] v]
| Click here| to set up additional payment methods
Delivery Method: (?) [ Brokerage Account] v]
| Click here| to set up additional certificate delivery methods
<== Back Next ==>
Click on (?) icons for help
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BioQuestIPO.com:Confrim (1) Enter Bid
(2) Payment/Delivery
(3) Confirm
(4) Finish
Dear Frodo Baggins,
Please confirm the details of the bid you have submitted.
Please remember that bids will not be accepted until payment
has been received by the Escrow Agent(?).
The auction is subject to close as determined by the algorithm
embedded in the Dutch Auction technology being used. If the
auction ends before your payment has been received, your bid
will automatically be canceled and your money is refunded.
Number of Shares: (?) 1
Price Per Share: (?) $10.00
Total: (?) $ 10.00
Payment Method: (?) Wire Transfer
Delivery Method: (?) Brokerage Account
Verification of Taxpayer Identification
Please select one of the options below:
( ) I am a citizen of the United States of America
( ) I am not a citizen of the United States of America
If you are a citizen of the United States, you must fill in the
Following information:
Under penalty of perjury, I certify that:
. The number entered below is my correct Tax
Identification Number.
. I am not subject to backup withholding on dividend or
interest funds by the Internal Revenue Service because
(1)I am exempt from backup withholding, or (2)I have not
been notified by the IR that I am subject to backup
withholding.
Submittal of this form denotes certification of these statements.
Please enter you Taxpayer Identification Number, omitting the
hyphens. For individuals, this is your Social Security Number.
Taxpayer Id Number: (?) [ ]
Please enter your password: [ ]
<== Back Submit Bid ==>
II-61
Click on (?) icons for help
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BioQuestIPO.com:Confirm (1) Enter Bid
(2) Payment/Delivery
(3) Confirm
(4) Finish
Your bid could not be submitted.
The password you entered is incorrect.
Please go back and correct the problem.
-------
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[BioQuest Logo Graphic] Help | Bid Now
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BioQuestIPO.com:Bid (1) Enter Bid
(2) Payment/Delivery
Your bid could not be submitted (3) Confirm
(4) Finish
Untied States citizens must enter a valid Tax Identification number.
Non-U.S. citizens who do not have a tax ID number must enter only their password
Please go back and correct the problem.
-------
<== Back
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II-64
BioQuestIPO.com:Bid (1) Enter Bid
(2) Payment/Delivery
(3) Confirm
(4) Finish
Dear Frodo Baggins,
Your bid for BioQuestIPO.com has been received, and will be processed. (?)
Please remember that bids will not be accepted until payment has been received
by the Escrow Agent. (?)
If you are paying by check or wire transfer, please make sure that the payment
is for the exact amount listed below. If you submit a payment which is either
too large or too small, your bid will automatically be rejected.
You must also write the Unique bid Number (?) on the check, money order or wire
transfer to ensure that your bid is processed properly. If you do not include
this bid number, your bid will be rejected. IT MUST INCLUDE THE LETTERS UBN.
The auction is subject to close as determined by the algorithm embedded in the
Dutch Auction technology being used. The maximum duration of the auction will be
120 days. If the auction ends before your payment has been received, your bid
will automatically be canceled.
Bid Number: (?) UBN000310000044
Number of Shares: (?) 1
Price Per Share: (?) $10.00
Total: (?) $ 10.00
Payment Method: (?) Wire Transfer
Delivery Method: (?) Brokerage Account
Please Click Here to Print Your Invoice
---------------------------------------
Click on (?) icons for help
Please click Here to Return to Offering
---------------------------------------
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II-65
{BioQuest Logo] BioQuestIPO.com
P.O. box 15
Fairfax Station, Virginia 22039
1-866-468-6228
Bid Invoice
Please Print this Invoice out for your records
Bid Placed By: Bid Placed for:
Frodo Baggins Company: BioQuestIPO.com
7 Arora Borialis Offering: 1,000,000
Middle Earth FL30667 Minimum Price Per Share: $10.00
Auction Ends on: Mar 9, 2002 17:30
(subject to change)
Unique Bid Number Date Placed Number of Shares Price Per Share Total Bid
- ----------------- ----------- ---------------- --------------- ---------
UBN000010000048 11/28/01 11:08:00 AM 1 $ 10.00 $ 10.00
SubTotal $ 10.00
Total $ 10.00
Method of Payment Selected: Wire Transfer
Certificate Delivery Method: Brokerage Account
*Notes:
Please note that payment must be received by the Escrow Agent prior to the
closing of the auction. Your bid cannot be processed until payment has been
received.
You have chosen to pay by certified check. In order for your bid to be properly
processed by the Escrow Agent, you must include your Unique Bid Number on the
certified check or money order. If the unique bid number is not present on your
certified check or money order, the Escrow Agent will not be able to match your
payment with your bid, and your bid will automatically be rejected.
II-66
From: bioq_info@BioQuestIPO.com
To: cduncan@sprintmail.com
Sent: Tuesday, November 28 2001 11:07
Subj: BioQuestIPO.com Bid Notice
Dear Bilbo,
You have successfully submitted a bid with BioQuestIPO.com!
Bid Summary:
Company Name: BioQuestIPO.com
Unique Bid #: UBN000010000048
Bid Price: $10.00
# of Shares: 1
Total Cost: $10.00
Your bid is currently being processed. Once all of your funds have been received
by the escrow agent, your bid will be officially accepted and you will be
notified by email. Note, that you may place more than one bid and can cancel
your bid any time before the auction closes. We will also notify you 24 hours
prior to the closing of the auction, that the auction is about to close, and
that you have a final opportunity to cancel your bid. Unless you cancel, your
bid will continue to be valid as an accepted bid, and considered for processing
at the close of the Auction.
Please check the My Bids page frequently for status updates. Should you have a
problem, please email us at bioq_info@BioQuestIPO.com.
Remember, in the event of a tie, shares will only be allocated by the time a bid
is officially accepted, on a first come first serve basis.
Thank you.
BioQuestIPO.com
II-67
[BioQuest Logo Graphic] Help | Bid Now
[Home] [My Profile] [IPO Offering] [My Bids] [Contact Us]
About BioQuest IPO.com
Getting Started
FAQs
Contact Us
Welcome to My Bids Area!
Your Bids
Your Current Bids:
Company Bid # Amount Status
------- ----- ------ ------
BioQuestIPO.com UBN000010000048 $10.00 Processing
Total: $20.00
If you wish to cancel a bid click on the Company Name for the
specific bid you wish to cancel. Then click on "Cancel this Bid"
[Verisign Logo]
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Company BioQuestIPO.com: Current Bid
Date Bid Placed: 11/28/01 11:07:13AM
Bid Number: (?) UBN000010000048
Number of Shares: (?) 1
Price Per Share: (?) $10.00
Total: (?) $10.00
Escrow Balance: $ 0.00
Payment Method: (?) Certified Check
Delivery Method: (?) Brokerage Account
Status: Processing
Cancel this Bid
- ---------------
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Are you sure you want to Cancel this bid?
Please Enter Your Password:
[ ]
[Cancel Your bid]
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II-70
[BioQuest Logo Graphic] Help | Bid Now
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The password you entered in incorrect. Please try again.
II-71
BioQuest International, Inc. Help | Log Out
[Home] [My Profile] [Offering] [My Bids]
Your bid was canceled.
See your Offering information on the "My Bids" page for more details.
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II-72
From: bioq_info@BioQuestIPO.com
To: cduncan@sprintmail.com
Sent: Tuesday, November 28 2001 11:38
Subj: BioQuestIPO.com Bid Cancellation
Dear Frodo,
Your bid has been canceled and you will receive a refund check via postal mail
within 30 days. You will be sent a check for the full amount.
Below is a summary of your transaction:
UBN: UBN000010000048
Company Name: BioQuest
Bid Price: 10.00
Number of Shares: 1
Total Cost: 10.00
Refund Amount: 0.00
Thank you for your interest in BioQuest.
II-72A
INVESTOR HELP SCREENS
Including links to the Bidding Tutorial, Bidding Tips
Frequently Asked Questions
Investor Help
Bidding
How To Bid
- ----------
Follow these instructions to learn all the details about our Dutch Auctions, the
bidding process and what you can do to bid successfully on the BioQuest
offering. You can also get some quick answers to the most frequently asked
questions about bidding.
Glossary of Bidding Terms for our Offering
- ------------------------------------------
Definitions of terms used in the bidding process. Look here for explanations of
unfamiliar terminology, or to make sure you understand exactly what is required
for each of the forms you need to fill out to place your bid.
II-73
Investor Help
Bidding
How To Bid
Tutorial
- --------
Provides a step-by-step walk-through of the bidding process. Especially for
beginners and first time users, this tutorial is designed to take you through
the bidding process, from choosing a bid price and the number of shares, to
sending in your money all the way through to the receipt of your shares. You
will need to go through this tutorial before you are allowed to place a bid.
Frequently Asked Questions
- --------------------------
Answers to the most frequently asked questions about the bidding process, and
Dutch Auctions. Look here for quick answers to some of your most important
questions.
QuickTips
- ---------
10 Important Tips every bidder should know.
II-74
Investor Help
Bidding
How To Bid
BIDDING TUTORIAL
Accessing the Prospectus
Placing a Bid
Selecting Payment and Delivery Methods
Confirming your Bid and Taxpayer Status
Your Final Bid and Printing Your Invoice
Bidding Tutorial
A Step by Step Tutorial of the Bidding Process.
For first time and beginner bidders, this tutorial will provide you with a
complete walk-through of the bidding process, from reading the prospectus to
placing your bid, setting up a payment method and confirming your bid. You will
need to go through this tutorial before you are allowed to place a bid.
Click Here to proceed to step 1: Reading the Prospectus
- -------------------------------------------------------
II-75
Investor Help
Bidding
How To Bid
Bidding Tutorial
ACCESSING THE PROSPECTUS
Placing a Bid
Selecting Payment and Delivery Methods
Confirming your Bid and Taxpayer Status
Your Final Bid and Printing Your Invoice
NOTE: ALL NUMBERS USED IN THE FOLLOWING TUTORIAL ARE FOR EXAMPLE PURPOSES ONLY!
Accessing the Prospectus
On the Welcome to Our Offering page, you will see an Auction tab which contains
a company name and two links: a link to download a copy of our prospectus in PDF
format, a link which you can follow to access the prospectus and then place a
bid for our shares.
Each time you place a bid for a company's shares, you must access the
company's prospectus.
[Auction]
[Company] [Prospectus] [Auction]
------- ---------- -------
XYZ Corporation Download Access
PDF File Prospectus &
Bid
To access XYZ Corporation's prospectus only, on this website, click on the
"Download PDF File" link in the second column.
If you choose to download the prospectus in PDF format, you will need a copy of
Adobe Acrobat installed on your computer. A free version of Adobe Acrobat
Reader, as well as download and installation instructions for most major
operating systems is available from Adobe's Web site wwww.adobe.com.
To access XYZ Corporation's prospectus and place a bid, click on the "Access
Prospectus & Bid" link in the third column. (Note: by clicking this link you
will access the prospectus each time you place a bid.)
Once you have had accessed the prospectus and wish to access the bidding
screens, you can indicate it by clicking the "Yes" button on the last page of
the company's prospectus. You may then proceed to the bid area.
------------------------------------------------------------
| Once you have accessed the prospectus, you may place a |
| bid for the company's shares by indicating below. |
| |
| I HAVE ACCESSED THE PROSPECTUS OF THE COMPANY |
| OFFERING ITS SHARES FOR SALE AND WISH TO PLACE A BID. |
| |
| [ ] Yes [ ] No |
| |
| [Place a bid] |
------------------------------------------------------------
Click Here to Proceed to Section 2: Placing a Bid
- -------------------------------------------------
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Investor Help
Bidding
How To Bid
Bidding Tutorial
Accessing the Prospectus
PLACING A BID
Selecting Payment and Delivery Methods
Confirming your Bid and Taxpayer Status
Your Final Bid and Printing Your Invoice
Placing a Bid
Once you have indicated that you have accessed the prospectus, you will
have access to the bidding pages.
[Auction]
[Company] [Prospectus] [Auction]
------- ---------- -------
XYZ Corporation Download Access
PDF File Prospectus &
Bid
The first step in placing a bid is to determine how many shares you wish to
purchase, and what price you are willing to pay for each of those shares.
Remember, once the auction closes, shares are allotted to the highest bidders
first. Even though everyone who receives shares pays the same price for them,
the higher you bid, the more likely you are to receive the entire allotment of
shares for which you placed a bid. Low bidders may receive all, some or none of
the shares that they bid for, depending on how many shares are available, how
many other bidders have placed higher bids and what the clearing price is.
To begin placing your bid, first enter the number of shares that you are willing
to purchase.
Next, enter the Price Per Share that you are willing to pay.
Number of Shares: (?) [ ]
Price Per Share: (?) [ ]
Total: (?) $[ ]
The "Total" field will automatically be filled in for you. This is the exact
amount of your bid, and your payment received by the Escrow Agent must match
this amount exactly.
Please note the icons throughout the bidding sections. Clicking on these icons
will bring up a window with a definition and explanation of what each field is
for, and guidelines for filling in those fields correctly. Please refer to these
help sections if you have any questions.
Once you have filled in the number of shares you want to purchase and the price
per share you are willing to pay, you are ready to proceed to the payment method
section. Click the "Next" button at the bottom of the bidding form to proceed.
Click Here to Proceed to Section 3: Selecting Payment and Delivery Methods
- --------------------------------------------------------------------------
II-77
Investor Help
Bidding
How To Bid
Bidding Tutorial
Accessing the Prospectus
Placing a Bid
SELECTING PAYMENT AND DELIVERY METHODS
Confirming your Bid and Taxpayer Status
Your Final Bid and Printing Your Invoice
Selecting Payment and Delivery Methods
Before your bid can be processed, you must indicate how you wish to pay for the
shares you are bidding on. Please note that bids cannot be accepted until the
funds have been received by the Escrow Agent.
To select a payment method, you must have already created and set up at least
one payment method in your profile. The payment methods available to you in the
bidding section will depend on what payment methods you have already
established.
To choose which payment you would like to utilize for a specific auction, select
one from the pull-down menu.
/
Payment \/ List of Available Payment methods
Method:[?] Cashier's Check/Money Order
Wire Transfer
There are some important factors to consider when selecting a payment method.
First and foremost, your payment MUST be received by the Escrow Agent before
your bid can be accepted. If for any reason your payment is delayed, mis-routed,
lost or returned, your bid will be canceled. Please also note that the closing
of the auction is subject to close as determined by the algorithm embedded in
the Dutch Auction technology being used. If the auction closes before your
payment is received, your bid will automatically be canceled.
Some other important factors include:
o A Cashier's/Bank Check, Money Order or Wire Transfer must have your Unique
Bid ID prominently printed on it, otherwise the Escrow Agent will
not be able to match your bid with your payment, and your bid will be
rejected at the close of the auction.
Please also note that all residual funds (i.e., the difference between the final
cost of the shares you have been allotted and the amount that you previously
sent in) will be returned to you by check within 2 weeks, regardless of the
payment method which you utilized.
You must also select a delivery method for your stock certificates, should you
be allotted shares at the end of the auction. You have a maximum of two choices,
both of which must be established and set up in your profile prior to placing a
bid. Once you have done so, you will be able to select which method of stock
certificate delivery you wish to use for each auction you participate in.
Select the delivery option you desire from the pull-down menu.
/
Delivery \/ List of Available Delivery methods
Method: [?] Send to My Brokerage Account
Hold at Stock Transfer Agent
Once you have selected a payment and delivery method, click the "Next" button to
proceed to the bid confirmation page.
Click Here to Proceed to Section 4: Confirming Your Bid and Taxpayer Status
- ---------------------------------------------------------------------------
II-78
Investor Help
Bidding
How To Bid
Bidding Tutorial
Accessing the Prospectus
Placing a Bid
Selecting Payment and Delivery Methods
CONFIRMING YOUR BID AND TAXPAYER STATUS
Your Final Bid and Printing Your Invoice
Confirming your Bid and Taxpayer Status
Once you have selected a payment method and delivery method, you are ready to
confirm the details of your bid and verify your Taxpayer ID number.
Make sure that the number of shares you have bid on, and the price per share
that you indicated you were willing to pay, are both correct. Also double check
the payment and delivery methods that you selected in step 2.
Number of Shares: [?] 1,000
Price Per Share: [?] $27.00
Total: [?] $27,000.00
Payment Method [?] Wire Transfer
Delivery Method [?] Deliver to Brokerage
Account
If all of that information is correct, you are now ready to confirm your bid.
First, you must indicate whether or not you are a citizen of the United States.
Choose the appropriate option from the two which are listed.
Please select one of the options below:
[x] I am a citizen of the United States of America
[ ] I am NOT a citizen of the United States of America
If you are a citizen of the United States of America, then you must verify that
the disclosure statement which follows is true.
Under penalty of perjury, I certify that:
* The number of entered below is my correct
Tax Identification Number.
* I am not subject to backup withholding on dividend
or interest funds by the Internal Revenue Service
because (1) I am exempt from backup withholding, or
(2) I have not been notified by the IRS that I am
subject to backup withholding.
Submittal of this form denotes certification of these
statements. Please enter your Taxpayer Identification
Number, omitting the hyphens. For individuals, this is
your social security number.
Taxpayer ID Number: [?] [ ]
II-79
If the statement above is true, you must indicate such by entering your Taxpayer
ID Number. For individuals, this is your social security number.
If you are not a citizen of the United States of America, you are not required
to enter anything into the Taxpayer ID Number field.
Finally, once you have filled in the required bids, if you are certain that
your bid information is correct, enter your password (this is the same as the
password you used in the Offering section of the site) into the password
field and then click on the "Confirm Bid" link.
Please enter your password [ ]
<-- Back Confirm Bid -->
The next screen will include the final details of your bid, as well as any
pertinent instructions regarding your payment or delivery methods. There will
also be a link which you can use to display a printable invoice for your
records. You should also include a printed copy of this invoice with any
payments you need to send in to the Escrow Agent.
Click Here to Proceed to Section 5: Your Final Bid and Invoice
- --------------------------------------------------------------
II-80
Investor Help
Bidding
How To Bid
Bidding Tutorial
Accessing the Prospectus
Placing a Bid
Selecting Payment and Delivery Methods
Confirming your Bid and Taxpayer Status
YOUR FINAL BID AND PRINTING YOUR INVOICE
Your Final Bid and Printing Your Invoice
Once your final bid has been confirmed, you will see a page summarizing the
details of your bid.
The most vital piece of information presented on this page is your UNIQUE BID
NUMBER. You should pay careful attention to this number. If you have any
questions regarding your bid, or any problems with your payment, you MUST refer
to this number.
Bid Number: [?] UBN123450123456
Number of Shares: [?] 1,000
Price Per Share: [?] $27.00
Total: [?] $27,000.00
Payment Method [?] Wire Transfer
Delivery Method [?] Deliver to Brokerage
Account
The Unique Bid Number is the only piece of information which the Escrow Agent
can use to identify your payment. Therefore, if you chose to pay with a
Cashier's Check, Bank Check, Wire Transfer, or Money Order, you must include
your Unique Bid Number on your payment. If you are paying by Cashier's/Bank
Check or Money Order, write the Unique Bid Number in the "memo" area. If you are
paying by wire transfer, make sure that your bank includes the Unique Bid Number
as one of the comment areas on your wire transfer. IT MUST INCLUDE THE LETTERS
"UBN".
Lastly, you will notice a link to a printable invoice.
Please Click Here to Print Your Invoice
---------------------------------------
Click on that link to go to a page which you can print, and which will serve as
the invoice for your bid. To help the Escrow Agent identify your payment,
if you choose to pay by Cashier's/Bank Check or Money Order, include a copy of
the invoice with your payment.
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Investor Help
Bidding
How To Bid
Frequently Asked Questions
How does a Dutch Auction work?
How does the bidding process work?
How can I pay for the IPO shares I bid on?
Who and what is an escrow/transfer agent?
If I am allocated shares, how will I receive them?
When can I trade my shares?
How can I trade my shares?
Answers to the most frequently asked questions about the bidding process, and
Dutch Auctions. Look here for quick answers to some of your most important
questions.
II-82
Investor Help
Bidding
How To Bid
Frequently Asked Questions
How does a Dutch Auction work?
How does the bidding process work?
How can I pay for the IPO shares I bid on?
Who and what is an escrow/transfer agent?
If I am allocated shares, how will I receive them?
When can I trade my shares?
How can I trade my shares?
How does a Dutch Auction work?
The normal auction, as used on ebay.com for example, is used to sell one
specific item, with the market price obviously set to the highest bid. A "Dutch
Auction" is used to sell many items, in our case, shares of a company's stock. A
Dutch Auction is often blind, whereby each bidder does not see anyone else's
bids. At the conclusion of the auctions, the bids are placed in descending
order. The market price (or clearing price) is set to the lowest bid that sells
the number of items being sold. In our Dutch Auction, bids less than $10 or more
than $14 are invalid and will be rejected.
Example:
BioQuest wants to sell 1 million shares of its stock to the public. The minimum
they are willing to accept for the stock is $10 per share. This means that if
the shares are not sold at $10/share or higher, BioQuest will withdraw the IPO.
BioQuest receives the following bids, ordered from highest to lowest share
price:
* Bids of 100,000 shares @ $14 per share
* Bids of 100,000 shares @ $13 per share
* Bids of 150,000 shares @ $12 per share
* Bids of 400,000 shares @ $11.50 per share
* Bids of 750,000 shares @ $11 per share
* Bids of 1,000,000 shares @ $10 per share
In this example, the "clearing price" would be set to $11, as the 1,000,000th
share is sold as part of the $11 per share groups bid. Therefore, bids from
$11.50-$14 would get their full allotment (all the shares they requested), but
they would purchase them at a price of $11 per share. Bids at $11 would receive
only 250,000 of their requested 750,000 shares (or 33 1/3% of the shares each
bidder bid on). Bids at $10 would receive nothing.
This is indeed a simple example used to illustrate the Dutch Auction process. In
reality, no single bidder may bid on more than 10% of the total number of shares
being sold. Investors should bid the highest price that they would be willing to
pay for the stock. This determines the price that yields the fairest results for
both the investors and the Company.
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Investor Help
Bidding
How To Bid
Frequently Asked Questions
How does a Dutch Auction work?
How does the bidding process work?
How can I pay for the IPO shares I bid on?
Who and what is an escrow/transfer agent?
If I am allocated shares, how will I receive them?
When can I trade my shares?
How can I trade my shares?
How does the bidding process work?
Now that you have registered with us, you have access to the online BioQuest
Prospectus. Here's how the bidding process works:
Next to BioQuest under Company, you will see two links: one to access the
prospectus only and one to access the prospectus and then place a bid. It is our
goal to encourage prudent investing, and we want every bidder to carefully
evaluate our company so that they can make educated bids. You must click on the
"Access Prospectus & Bid" link, access the prospectus and then click on the
"Yes" button at the end of the of the prospectus. You will then have access to
the bidding pages. You may access the prospectus again in PDF format by clicking
on the "Download PDF File" (to download the prospectus only) or by clicking on
the "Access Prospectus & Bid" link to access the prospectus and the bidding
screens. From the BioQuest.com Bid page, you get to a series of screens asking
you to make your bid. You must provide the number of shares you wish to bid on,
the highest price you would be willing to pay for those shares (in no case less
than $10 or more than $14), where you want those shares sent (e.g. Your
brokerage account or held by the Transfer Agent,) and how you will pay for your
bid. Your password is required to certify your bid and confirm the information.
Once submitted, your bid will be marked "processing." At this time, you must
make payment arrangements. If you selected bank account debit on the bidding
for, your payment will be automatically transferred to the escrow account. If
you selected certified check, money order or wire transfer, you must manually
send in your payment. It is critical that you write your Unique Bid Number on
your check, or in the reference link on the wire instructions. Once your payment
is received and cleared by the Escrow Agent, your bid is market as "accepted."
If you are not allocated any shares, all of your money will be returned to you,
or if you are allocated shares but at a lower price, the excess funds will be
immediately returned as well. All funds will be returned to you by check, sent
out after the close of the auction and the auditor's approval (usually within 5
business days).
While bidding is available 24 hours a day, any bids submitted after 5:00 PM
Eastern Time will be processed the next business day.
That's it! Keep coming back to My Bids page to view the status of each of your
bids. Remember the auction is subject to close as determined by the algorithm
embedded in the Dutch Action technology being used at any time prior to the end
of the 120 day period, so remember to bid early and to check back often!
*(If you are not from a state where we are qualified to offer shares at the time
of your registration, you will receive an error page after the registration is
complete indicating that we are not yet qualified to offer shares in your state.
You will not be permitted to place a bid at that time. We will contact you via
email and invite you back to the website to place bids once we are qualified to
offer shares in your state.)
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Investor Help
Bidding
How To Bid
Frequently Asked Questions
How does a Dutch Auction work?
How does the bidding process work?
How can I pay for the IPO shares I bid on?
Who and what is an escrow/transfer agent?
If I am allocated shares, how will I receive them?
When can I trade my shares?
How can I trade my shares?
How can I pay for the IPO shares I bid on?
You can pay for the IPO shares you bid on in one of two ways:
* Send in a certified check or money order for the amount due. NO PERSONAL
CHECKS WILL BE ACCEPTED! (You must include the Unique Bid Number on your
certified check or money order.)
* Wire funds directly from your bank or brokerage account. (You must include
the Unique Bid Number as part of your wire transfer instructions.)
Remember, shares will only be allocated to those investors whose money has been
received and confirmed by the Escrow Agent. Please keep in mind the following
amount of time that may be necessary for your payment to clear:
* Certified check or money order - Clears the day it is received by the
Escrow Agent
* Wire - Clears the day it is received (note that wire transfer cutoffs are
5PM Eastern Time).
PLEASE NOTE, THE ABOVE TIME GUIDELINES CAN VARY DEPENDING ON YOUR BANK.
THEREFORE, UNTIL FUNDS ARE RECEIVED AND CONFIRMED BY THE ESCROW AGENT, YOUR BID
IS NOT ACCEPTED.
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Investor Help
Bidding
How To Bid
Frequently Asked Questions
How does a Dutch Auction work?
How does the bidding process work?
How can I pay for the IPO shares I bid on?
Who and what is an escrow/transfer agent?
If I am allocated shares, how will I receive them?
When can I trade my shares?
How can I trade my shares?
Who and what is an escrow/transfer agent?
An escrow/transfer agent is the bookkeeper of funds coming in from the bidding
process of the Auction. The Escrow Agent is an FDIC insured bank. A Transfer
Agent is the bookkeeper for public companies' stock records. They keep track of
how many shares there are, where they are, and whom they belong to.
The Escrow Agent will hold your payment until the close of the auction or until
you cancel your bid, in which case, you will receive your refund in 2 weeks (Our
auction will not last longer than 120 days). If you are allocated shares, the
Transfer Agent will issue you the appropriate number of shares of stock. If not
allocated shares, the Escrow Agent will return all money to you directly by
check within two weeks.
II-86
Investor Help
Bidding
How To Bid
Frequently Asked Questions
How does a Dutch Auction work?
How does the bidding process work?
How can I pay for the IPO shares I bid on?
Who and what is an escrow/transfer agent?
If I am allocated shares, how will I receive them?
When can I trade my shares?
How can I trade my shares?
If I am allocated shares, how will I receive them?
Your shares can be held by the Transfer Agent, or automatically transferred to
any brokerage account you have. When you place a bid you will indicate how and
where you want your shares to be delivered.
If you choose to let the Transfer Agent hold your shares, they are held in book
entry form. You may choose to have the certificate sent to you or your brokerage
account at a later date.
If you want the shares sent to your brokerage account, you must take one
additional step. Upon notification of allocation, you will need to download a
form letter from the Transfer Agent, and forward that letter to your broker
requesting that they initiate the transfer certificates from the Transfer
Agent. This can usually occur in 24-48 hours.
II-87
Investor Help
Bidding
How To Bid
Frequently Asked Questions
How does a Dutch Auction work?
How does the bidding process work?
How can I pay for the IPO shares I bid on?
Who and what is an escrow/transfer agent?
If I am allocated shares, how will I receive them?
When can I trade my shares?
How can I trade my shares?
When can I trade my shares?
As soon as the company's stock begins trading on market, your shares are free to
trade. Upon completion of the offering and after the approval of the auditors,
the company anticipates the share will initially trade on the NASDAQ Bulletin
Board. We have not filed our application for listing but will do so promptly
after the date of the prospectus. Based on prior experience and advice from our
securities counsel, we believe qualification should occur within about two weeks
of the closing on this offering.
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Investor Help
|=> Bidding
How To Bid
Frequently Asked Questions
How does a Dutch Auction work?
How does the bidding process work?
How can I pay for the IPO shares I bid on?
Who and what is an escrow/transfer agent?
If I am allocated shares, how will I receive them?
When can I trade my shares?
How can I trade my shares?
How can I trade my shares?
You can trade your stock with your current broker. As long as the stock was
transferred to your brokerage firm, you are free to begin trading as soon as a
market develops. If, unexpectedly, a market does not develop shortly after
closing on this offering, you will be unable to trade your shares until a
secondary market develops.
II-89
BIDDING QUICK TIPS
New to bidding? Here are some quick facts to help you:
1. Before placing a bid, it is always a good idea to be a prudent investor who
does his/her homework. You are highly encouraged to access the company's
prospectus, and do your own outside research, to understand the company
itself and make an educated bid.
2. The company sets the number of shares to be issued and the minimum bid
price. In order to place a bid, you must price your bid at or higher than
the minimum and up to the maximum bid price, and indicate the number of
shares you would like. For example, the minimum bid is $10.00 and the
maximum bid is $14.00. You may place your bid anywhere between $10.00 and
$14.00. Bids outside that range will be rejected.
3. The higher your bid, the more likely you are to be allocated shares. Your
bid must be an amount that you are willing to pay. Remember, you must come
up with the full cash amount of your bid before your bid is accepted into
the auction.
4. You may bid for as little as one share. However, no one investor,
individual or institution can place a bid for more than 10% of the total
shares offered to for our company. In BioQuest's offering of 1,000,000
shares, you may not bid for more than 100,000 shares.
5. Once you place a bid, the bid is not officially accepted until your money
is received at the Escrow.
6. BioQuest has the right to close the auction as determined by the algorithm
embedded in the Dutch Auction technology used.
7. Remember, in the event of a tie, shares will be allocated to investors on a
first come, first serve basis according to bid time.
8. Each bidder will be assigned a Unique Bid ID for each bid placed. It is
important to remember that this Unique Bid ID needs to be written on your
certified check or included in your wire instructions. Without this Unique
Bid ID on your check, your check will be returned or wire refused, and your
bid not accepted.
9. You can cancel your bid at any time before the close of the auction by
going to the "My Bids" section of the website, clicking on the company's
name beside the bid's Unique Bid Number and following the prompt
instructions to cancel your bid. Once canceled, your money will be returned
to you by check within two weeks. further, just prior to the close of the
Auction, you will be sent a "confirmation" email announcing our intention
to close the Auction, and giving you a final opportunity to withdraw any of
your bids from the Auction. You will have 24 hours to cancel. All bid snot
canceled, will be considered for processing at the close of the Auction.
10. Note, that you will be notified via email, just prior to the close of the
Auction, that you have a final opportunity to cancel your bids. You will be
given 24 hours to cancel. Those bids not canceled within the 24 hour time
period, will continue to be valid and accepted bids, and will be considered
for processing at the close of the auction. Once the Auction has closed,
the Auction process has been audited, and a clearing price has been
established, you will be notified by email accompanied by a finalized
prospectus reflecting the clearing price.
II-90
Investor Help
|=> Bidding
|=> Glossary of Bidding Terms for our Offerings
Certificate Delivery Method
Number of Shares
Payment Method
Price Per Share
Escrow Agent
Stock Transfer Agent
Taxpayer ID Number
Total Bid
Unique Bid Number
Definitions of terms used in the bidding process. Look here for explanations
of unfamiliar terminology, or to make sure you understand exactly what is
required for each of the forms you need to fill out to place your bid.
II-91
Investor Help
|=> Bidding
|=> Glossary of Bidding Terms for our Offerings
Certificate Delivery Method
Number of Shares
Payment Method
Price Per Share
Escrow Agent
Stock Transfer Agent
Taxpayer ID Number
Total Bid
Unique Bid Number
Certificate Delivery Method
You can have your IPO shares delivered in one of two way:
. Your shares can be held with the Transfer Agent, or
. You can choose to have your shares automatically transferred to
your brokerage account.
When you place a bid, you are required to indicate which delivery method
you choose.
See Also:
Bidding Tutorial: Selecting Payment and Delivery Methods
- ----------------- --------------------------------------
Frequently Asked Bidding Questions: If I am allocated shares, how will
I receive them?
- ---------------
II-92
Investor Help
|=> Bidding
|=> Glossary of Bidding Terms for our Offerings
Certificate Delivery Method
Number of Shares
Payment Method
Price Per Share
Escrow Agent
Stock Transfer Agent
Taxpayer ID Number
Total Bid
Unique Bid Number
Number of Shares
This is the minimum number of shares that you are willing to purchase.
Depending on the price which you indicated that you are willing to
pay per share, and the time and date that you submitted your bid, you
may not receive all of the shares you have requested.
Important: No investor may bid or received more than 10% (100,000) of the total
number of shares being offered (1,000,000).
II-93
Investor Help
|=> Bidding
|=> Glossary of Bidding Terms for our Offerings
Certificate Delivery Method
Number of Shares
Payment Method
Price Per Share
Escrow Agent
Stock Transfer Agent
Taxpayer ID Number
Total Bid
Unique Bid Number
Payment Method
You can pay for your shares bid for in one of two ways:
. Send in a certified check or money order for the amount due.
. Wire funds directly from your bank or brokerage account.
See also:
Bidding Tutorial: Selecting Payment and Delivery Methods
Frequently Asked Bidding Questions: How can I pay for the IPO shares I bid on?
II-94
Investor Help
|=> Bidding
|=> Glossary of Bidding Terms for our Offerings
Certificate Delivery Method
Number of Shares
Payment Method
Price Per Share
Escrow Agent
Stock Transfer Agent
Taxpayer ID Number
Total Bid
Unique Bid Number
Price Per Share
This is the maximum price you are willing to pay per share (but in no case less
than $10 or more than $14). [Note that the final offering price of stock is
determined by calculating that price at which the entire allocation of shares
being offered to the public will be sold (the "clearing price").] If you have a
successful bid, the price per share you actually pay will most likely differ
from that which you indicated you are willing to pay. It can never be higher,
but will be equal to or lower than the price which you bid.
Shares are allocated to the highest bidders first. Therefore, even though your
bid may be above the minimum bid price, you may or may not receive any shares,
depending on how many people placed bids which were higher than yours.
See also:
Frequently Asked Questions: How does a Dutch Auction work?
- -----------------------------------------------------------
II-95
Investor Help
|=> Bidding
|=> Glossary of Bidding Terms for our Offerings
Certificate Delivery Method
Number of Shares
Payment Method
Price Per Share
Escrow Agent
Stock Transfer Agent
Taxpayer ID Number
Total Bid
Unique Bid Number
Stock Transfer Agent
A Transfer Agent is the bookkeeper for public companies' stock records.
They keep track of how many shares are issued, where they are located,
and to whom they belong.
II-96
Investor Help
|=> Bidding
|=> Glossary of Bidding Terms for our Offerings
Certificate Delivery Method
Number of Shares
Payment Method
Price Per Share
Escrow Agent
Stock Transfer Agent
Taxpayer ID Number
Total Bid
Unique Bid Number
Escrow Agent
An Escrow Agent acts as the depository of all monies received for bids placed.
The Escrow Agent is an FDIC insured bank.
II-97
Investor Help
|=> Bidding
|=> Glossary of Bidding Terms for our Offerings
Certificate Delivery Method
Number of Shares
Payment Method
Price Per Share
Escrow Agent
Stock Transfer Agent
Taxpayer ID Number
Total Bid
Unique Bid Number
Tax Payer ID Number
For individuals, this is your 9 digit Social Security Number, entered without
the hyphens ("-"). You are required to verify that the following information is
true before we are able to accept your bid.
. The number entered below is the correct Tax Identification
Number for the individual placing the bid.
. The individual placing the bid is not subject to backup
withholding on dividend or interest funds by the Internal
Revenue Service because he/she:
1. Is exempt from backup withholding, or
2. Has not been notified by the IRS that he/she is
subject to backup withholding.
See also:
Bidding Tutorial: Confirming your Bid and Taxpayer Status
- ---------------------------------------------------------
II-98
Investor Help
|=> Bidding
|=> Glossary of Bidding Terms for our Offerings
Certificate Delivery Method
Number of Shares
Payment Method
Price Per Share
Escrow Agent
Stock Transfer Agent
Taxpayer ID Number
Total Bid
Unique Bid Number
Total Bid
This amount is automatically calculated by multiplying the number of shares you
indicated you were willing to purchase by the price per share you indicated you
were willing to pay.
This is the total amount that you will need to send to the Escrow Agent in order
to insure that your bid is accepted. It is important that you send EXACTLY this
amount, along with your Unique Bid Number, otherwise your bid will be
automatically rejected.
II-99
Investor Help
|=> Bidding
|=> Glossary of Bidding Terms for our Offerings
Certificate Delivery Method
Number of Shares
Payment Method
Price Per Share
Escrow Agent
Stock Transfer Agent
Taxpayer ID Number
Total Bid
Unique Bid Number
Unique Bid Number
This number is generated by BioquestIPO.com and is assigned to all completed
bids. It allows you to track your current bids, and it allows the Escrow Agent
to match up your bid with your payment.
It is absolutely vital that you write your unique bid number on all payments,
whether they be a certified bank check, money order or wire transfer. Failure to
do so will result in your bid status remaining as processing, until the end of
the auction, at which time it will be rejected. The unique bid number is the
only way the Escrow Agent can match your bid with your payment.
Your Unique Bid Number will look as follows:
UBN123450123456
See also:
Bidding Tutorial: Your Final Bid and Printing your Invoice
- ----------------------------------------------------------
II-100
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FAQ SCREENS
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About BioQuest IPO.com Frequently Asked Questions
Getting Started
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Contact Us
o What is an IPO?
o What is a self-underwritten Direct Public Offering (DPO)?
o What is a Dutch Auction?
o What happens in case of a tie?
o How does the bidding process work?
o What information do I receive about BioQuest?
o How long will the auction be open?
o What is the minimum number of shares I can buy?
o How do I pay for the DPO?
o Who/What is the escrow/transfer agent?
o Can I change or cancel a bid?
o Can I submit more than one bid?
o What happens to my stock once I purchase it?
o When can I trade the stock?
o What happens if I bid for BioQuest's DPO and I get out bid or the
offering does not get done?
o How is BioQuest's website different from other sites offering online
IPO's?
o On what exchange will BioQuest's shares be listed?
o How can I receive a hard copy of BioQuest's prospectus?
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FOR THE INDIVIDUAL:
WHAT IS AN INITIAL PUBLIC OFFERING (IPO)?
An Initial Public Offering is when a corporation offers stock to the public for
the first time.
WHAT IS A SELF-UNDERWRITTEN DIRECT PUBLIC OFFERING (DPO)?
A self-underwritten DPO is when a company files to go public itself without the
use of a traditional investment banking firm.
WHAT IS A DUTCH AUCTION?
This is a system that enables all potential investors in an IPO to make a bid at
the price they are willing to pay for the stock in the aftermarket. The price
for the IPO is set at the price of the lowest bid price that sells all of the
allotted shares. All shares are priced at that price. The investors are
allocated their shares by filling the highest bid first and then in descending
bid price order.
An example:
BioQuest wants to sell 1,000,000 shares of its stock on an all-or-nothing basis
at $10/share minimum in a DPO. This means that if at least 1,000,000 shares are
not sold at $10/share to as high as $14/share, BioQuest will withdraw the DPO.
Investors then bid the price that they are willing to pay, understanding that
this is an auction that fills from the highest price to the lowest price. One
person may bid $14/share for 1,000 shares. Another, $10/share for 1 share.
Number of Shares Bid Price Aggregate Number of Success % if
Requested By ($) Shares at Bid Price 1,000,000
Bidders and Greater Valid Firm Bids
------- --------- ----------- ---------------
II-113
100,000 14 100,000 100%
100,000 13 200,000 100%
150,000 12 350,000 100%
400,000 11.50 750,000 100%
750,000 11 1,500,000 33.3%
1,000,000 10 2,500,000 0
In the example above, BioQuest desires to sell 1,000,000 shares of its stock and
a total of 2,500,000 shares were bid for at prices ranging from $10/shares to
$14/share. All bidders from $11.50/share to $14/share would receive 100% of
their shares bid for, and the aggregate number of shares in that range is
750,000. That leaves 250,000 shares for the next lowest bid group at $11/share.
However, there were 750,000 bids at that price. this means that each bidder
would receive 33 1/3 % of the number of shares they bid for because 250,000
divided by 750,000 equals 33 1/3%. Thus, $11/share is the "clearing price" and
the price all bidders will pay at the conclusion of the Auction. Those who bid
higher than $11/share will get refund checks sent to them from the Escrow Agent
for the difference. Likewise, those who bid at $11/share and sent in money to
the Escrow Agent for their total bid, would receive a refund for the shares
which were not allotted to them (66 2/3%). Those who bid at $10/share are deemed
"unsuccessful bidders" and 100% of their money would be refunded to them by the
Escrow Agent.
WHAT HAPPENS IN CASE OF A TIE?
If there are too many bids at the clearing price to fill them all with the
remaining shares, the following procedure will be carried out:
The total remaining shares to allocate will be divided by the total number of
shares bid on at the clearing price. If the percentage is less than 10%, then
bids will be filled in their entirety on a first-come, first-served basis based
on your bid submission time. If this percentage is greater than or equal to 10%,
then everyone who has a bid at the clearing price will receive that percentage
of their desired allotment. All partial share allotments will be rounded down to
the nearest whole number, and these combined partial shares will be allocated to
the bidders based on their time stamps, on a first-come first-served basis. See
the examples below for clarification.
Total shares offered in the DPO: 1,000,000 (see example above).
Clearing Price: $11.00
750,000 shares bid are allocated 100% to investors who bid from $11.50/share to
$14/share.
There are 250,000 shares left to be allocated amongst 750,000 bid for at the
$11/share price. (750,000 of the 1,000,000 offered were already allocated at
100% to bidders from $11.50/share to $14/share).
In this example each bidder at $11/share would receive 33 1/3% of the number of
shares they bid for because 250,000 divided by 750,000 equals 33 1/3%.
HOW DOES THE BIDDING PROCESS WORK?
First, you must be from a state in which BioQuest has filed its offering for
shares. In addition, you must meet the suitability standard for your state as
outlined in the State Qualification and Suitability Standards page of the
Bidding Tutorial. You can then access the prospectus and place a bid on an IPO
for the price you feel comfortable paying in the aftermarket and which will be
high enough to insure you are a "successful bidder". Remember, this is a Dutch
Auction that fills from the highest bid to the lowest bid. In this offering,
only bids between $10 and $14 will be considered valid.
WHAT INFORMATION DO I RECEIVE ABOUT BIOQUEST?
You should access BioQuest's prospectus before placing a bid. Our prospectus
will be available to you online or from this site you may go to Contact Us and
request a hard copy be sent to you via the U.S. Postal Service.
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HOW LONG WILL THE AUCTION BE OPEN?
The auction is subject to close as determined by the algorithm embedded in the
Dutch Auction technology being used. specifically, the algorithm would allow the
offering to remain open as long as bids demonstrate an upward trend and 120 days
have not elapsed since the commencement of the offering; however, once the trend
begins to rail off and trend downward by a decrease of 10% below the prior
highest bid, notice would be given that bids are no longer being accepted. In no
case will the auction remain open no longer than 120 days. Therefore, it is in
your best interest to place a bid and send your money to the Escrow Agent as
soon as possible.
The algorithm determining when this offering will close works as follows:
* As bids are received, a real time tracking mechanism is embedded in
the software which tracks the number of shares being bid for and the
price bid. As bids are being received from multiple bidders, a bid
price and number of shares per bid begin to create a trending process.
* In addition, bids placed initially are put into a "Pending" status and
are not "Accepted" until funds, matching the amount bid, are received
and cleared by the escrow agent. Once accepted status is achieved, all
accepted bids (the only valid bids) are tracked for trending upward or
downward.
* Once the threshold of accepted bids for 1,000,000 shares has been
reached, the trending mechanism is in place to determine the point in
time at which our proceeds will be maximized.
* The following example illustrates a probable situation, assuming our
$10 minimum and $14 maximum for the 1,000,000 shares all-or-nothing
offering.
Number of Shares Aggregate Number of
Requested by Bidders Bid Price ($) Shares at Bid Price and Greater
-------------------- ------------- -------------------------------
50,000 14 1,450,000
100,000 13.50 1,400,000
200,000 13 1,300,000
100,000 12.50 1,100,000
-----------------------------------------------------------------------------
400,000 12 1,000,000 threshold met
300,000 11.50 600,000
200,000 11 300,000
100,000 10 100,000
* In this example, if we assume that the first 1,000,000 shares bid for
and accepted fell between $10 and $12 per share, and that subsequent
shares bid and accepted demonstrated an upward trending as
II-115
illustrated, the algorithm would allow the offering to remain open as
long as the trend continued and 120 days have not elapsed. Once the
trend began to tail off and trend downwards, by a decrease of 10%
below the prior highest bid reached, bids would no longer be accepted.
* In fact, at this time, we will inform, via email, all bidders whose
bids have been placed, but whose funds have not been received in
escrow, that they have seven (7) days within which to send their
monies in and have their bids accepted. Once this period has passed,
as above, just prior to the close of the auction, each bidder will be
sent a "confirmation" email announcing our intention to close the
auction and they will be given a final opportunity to withdraw any of
their bids.
* Each bidder will be given 24 hours to cancel. Those bids not canceled
within the 24 hour time period, will continue to be valid as an
accepted bid and considered for processing and allocation at the close
of the auction.
* In the example above, assuming that no bidders withdrew their bids and
we closed the auction with accepted bids for 1,450,000 shares, the
clearing price, dictated by the algorithm which maximizes the proceeds
to BioQuest, is $12 per share, the price which all bidders will pay.
WHAT IS THE MINIMUM NUMBER OF SHARES I CAN BUY?
There is no minimum number of shares that a prospective bidder has to buy. You
can buy one (1) share to a maximum of 10% (100,000 shares) of the 1,000,000
share offering.
HOW DO I PAY FOR My SHARES?
You can pay for the shares you bid on in one of three ways:
o Send in a certified check or money order for the amount due.
o Wire funds directly from your bank or brokerage account.
o Have your bank account electronically debited (United States Residents
Only).
All payments are sent to and received by the Escrow Agent.
WHO AND WHAT IS THE ESCROW/TRANSFER AGENT?
An Escrow Agent is the bookkeeper of funds coming in from the bidding
process of the Auction. The Escrow Agent is an FDIC-insured bank.
A Transfer Agent is the bookkeeper for public companies' stock
records. They keep track of how many shares there are, where they are,
and whom they belong to.
CAN I CHANGE OR CANCEL A BID?
You can cancel your bid at anytime prior to the closing of the auction by going
to the "My Bids section of the website, clicking on the company's name beside
the bid's Unique Bid Number and following the prompt instructions to cancel your
bid. The only way to change a bid is to cancel your original bid and re-submit a
new bid. Further, just prior to the close of the Auction, each bidder will be
sent a "confirmation" email announcing our intention to close the Auction, and
giving you a final opportunity to cancel any of your bids from the Auction. Each
bidder will have 24 hours to cancel. You bid will continue to be valid as an
accepted bid, and considered for processing at the close of the Auction.
To cancel a bid at any time, from the Home Page click on "IPO Offering" where
you will be asked to fill in your Username and Password. You then click on the
"Submit" button which will deliver you to the "Welcome to our Offering" page.
From there, click the "My Bids" tab and you will be delivered to the page where
you can see your bids with the instructions "if you wish to cancel a bid, click
on the Company Name for the specific bid you wish to cancel." When the bidder
clicks on the "Cancel this Bid" button, the bid is automatically cancelled -
indicated in red for that particular bid under the "My Bids" tab.
CAN I SUBMIT MORE THAN ONE BID?
Yes. You can submit as many bids as you would like. Please remember that you can
only bid for up to 10% of the entire BioQuest offering. Therefore, the total
shares of all your bids may not exceed 100,000 BioQuest shares.
II-116
WHAT HAPPENS TO MY STOCK ONCE I PURCHASE IT?
When you place a bid, you indicate how you want the Transfer Agent to deliver
your shares. Either they may be held with the Transfer Agent or transferred to
your brokerage account
WHEN CAN I TRADE THE STOCK?
Shares are expected to begin trading on the NASDAQ Bulletin Board on or about
one week after the close of this Auction if this 1,000,000 share offering is
successful. We have not filed our application for listing but will do so
promptly after the date of the prospectus. Based on prior experience and advice
from our securities counsel, we believe qualification should occur within about
two weeks of the closing on this offering.
WHAT HAPPENS IF I BID FOR THE BIOQUEST'S DPO AND I GET OUT BID, OR THE OFFERING
IS WITHDRAWN?
If you were out bid or the offering does not go public, you will be returned all
monies by check from the Escrow Agent at the end of the auction. If you paid
originally by wire transfer, all funds will be credited to the account from
which you wired funds. All other payment methods will be reimbursed by check
from the Escrow Agent within two (2) weeks.
HOW IS BIOQUESTIPO.COM DIFFERENT FROM OTHER SITES OFFERING ONLINE IPO'S?
BioQuest's site is different from other sites offering "online" IPO's in several
ways:
o You can buy our stock directly from BioQuest on our site.
o You can pay for the DPO with a certified check/money order or wire transfer.
o We use a Dutch Auction method to allocate the purchase of shares.
o A self-underwritten offering done on our website enables anyone with the
requisite money to pay for their shares, to have an equal chance to buy
from 1 share to 10% of this BioQuest offering.
HOW CAN I RECEIVE A HARD COPY OF BIOQUEST'S PROSPECTUS?
You can print it out directly from the BioQuestIPO.com website. Or you may go
to Contact Us and request a copy to be sent by phoning, faxing or emailing us.
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ABOUT US/ ABOUT BIOQUEST IPO.COM SCREEN
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About BioQuest IPO.com About BioQuestIPO.com
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BioQuest International, Inc. was organized November 4, 1999
under the laws of Virginia as a privately held corporation
and to exist as a holding corporation for the purposes of
creating, establishing, acquiring, building and developing
various wholly owned subsidiary companies, all allied within
the alternative/complementary/integrative medical field.
BioQuest International, Inc. is the first company ever, to
do a self-underwritten, Direct Public Offering (DPO), over
the Internet, and using the Dutch Auction process. The funds
it will raise through this offering will infuse capital into
each of its proposed entities, as well as new ones it will
acquire upon the successful completion of the offering.
We invite you to learn more about BioQuest's business and
plans for the future, by Registering and accessing our
Prospectus.
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If you wish to change your profile information, press the "Update" button.
You can click here to change password/keyword info.
Items marked with a red asterisk (*) are required.
username:* FRODO
Courtesy
Title:* [ Mrs. ]
First Name:* [ Jeannie ] e.g. "John"
Last Name:* [ Nelson ] e.g. "Smith"
Email Address:* [ cduncan@sprintmail.com ]
e.g. "someone@somedomain.com"
Street
Address 1:*[ 9801 Beach Front Avenue ]
Street
Address 2:*[ ]
City:* [ Cocoa Beach ] State:* [ FL ] Zip:* [ 34996 ]
Country:* [ United States ]
Telephone Number:* Area Code ([ 555 ]) Tel. No. [ 555 ]-[ 5555 ]
International Info.* Country Code:* [ ] Province [ ]
*International Residents Only
CLick here to update your profile ==>
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If you wish to change your profile information, press the "Update" button.
You can click here to change password/keyword info.
Items marked with a red asterisk (*) are required.
username:* JEANNIE123
Courtesy
Title:* [ Mrs. ]
First Name:* [ Jeannie ] e.g. "John"
Last Name:* [ Nelson ] e.g. "Smith"
Email Address:* [ cduncan@sprintmail.com ]
e.g. "someone@somedomain.com"
Street
Address 1:*[ 9801 Beach Front Avenue ]
Street
Address 2:*[ ]
City:* [ Cocoa Beach ] State:* [ FL ] Zip:* [ 34996 ]
Country:* [ United States ]
Telephone Number:* Area Code ([ 555 ]) Tel. No. [ 555 ]-[ 5555 ]
International Info.* Country Code:* [ ] Province [ ]
*International Residents Only
CLick here to update your profile ==>
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If you wish to change your profile information, press the "Update" button.
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Items marked with a red asterisk (*) are required.
username:* JEANNIE123
Courtesy
Title:* [ Mrs. ]
First Name:* [ Jeannie ] e.g. "John"
Last Name:* [ Nelson ] e.g. "Smith"
Email Address:* [ cduncan@sprintmail.com ]
e.g. "someone@somedomain.com"
Street
Address 1:*[ 9801 Beach Front Avenue ]
Street
Address 2:*[ ]
City:* [ Cocoa Beach ] State:* [ FL ] Zip:* [ 34996 ]
Country:* [ United States ]
Telephone Number:* Area Code ([ 555 ]) Tel. No. [ 555 ]-[ 5555 ]
International Info.* Country Code:* [ ] Province [ ]
*International Residents Only
CLick here to update your profile ==>
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If you wish to change your profile information, press the "Update" button.
You can click here to change password/keyword info.
Items marked with a red asterisk (*) are required.
username:* JEANNIE123
Courtesy
Title:* [ Mrs. ]
First Name:* [ Jeannie ] e.g. "John"
Last Name:* [ Nelson ] e.g. "Smith"
Email Address:* [ cduncan@sprintmail.com ]
e.g. "someone@somedomain.com"
Street
Address 1:*[ 9801 Beach Front Avenue ]
Street
Address 2:*[ ]
City:* [ Cocoa Beach ] State:* [ FL ] Zip:* [ 34996 ]
Country:* [ United States ]
Telephone Number:* Area Code ([ 555 ]) Tel. No. [ 555 ]-[ 5555 ]
International Info.* Country Code:* [ ] Province [ ]
*International Residents Only
CLick here to update your profile ==>
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Contact Us You must supply your street address
If you wish to change your profile information, press the "Update" button.
You can click here to change password/keyword info.
Items marked with a red asterisk (*) are required.
username:* JEANNIE123
Courtesy
Title:* [ Mrs. ]
First Name:* [ Jeannie ] e.g. "John"
Last Name:* [ Nelson ] e.g. "Smith"
Email Address:* [ cduncan@sprintmail.com ]
e.g. "someone@somedomain.com"
Street
Address 1:*[ 9801 Beach Front Avenue ]
Street
Address 2:*[ ]
City:* [ Cocoa Beach ] State:* [ FL ] Zip:* [ 34996 ]
Country:* [ United States ]
Telephone Number:* Area Code ([ 555 ]) Tel. No. [ 555 ]-[ 5555 ]
International Info.* Country Code:* [ ] Province [ ]
*International Residents Only
CLick here to update your profile ==>
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Contact Us You must supply your city
If you wish to change your profile information, press the "Update" button.
You can click here to change password/keyword info.
Items marked with a red asterisk (*) are required.
username:* JEANNIE123
Courtesy
Title:* [ Mrs. ]
First Name:* [ Jeannie ] e.g. "John"
Last Name:* [ Nelson ] e.g. "Smith"
Email Address:* [ cduncan@sprintmail.com ]
e.g. "someone@somedomain.com"
Street
Address 1:*[ 9801 Beach Front Avenue ]
Street
Address 2:*[ ]
City:* [ Cocoa Beach ] State:* [ FL ] Zip:* [ 34996 ]
Country:* [ United States ]
Telephone Number:* Area Code ([ 555 ]) Tel. No. [ 555 ]-[ 5555 ]
International Info.* Country Code:* [ ] Province [ ]
*International Residents Only
CLick here to update your profile ==>
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[BioQuest Logo Graphic] Help | Bid Now
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FAQs
Contact Us You must supply your postal code
If you wish to change your profile information, press the "Update" button.
You can click here to change password/keyword info.
Items marked with a red asterisk (*) are required.
username:* JEANNIE123
Courtesy
Title:* [ Mrs. ]
First Name:* [ Jeannie ] e.g. "John"
Last Name:* [ Nelson ] e.g. "Smith"
Email Address:* [ cduncan@sprintmail.com ]
e.g. "someone@somedomain.com"
Street
Address 1:*[ 9801 Beach Front Avenue ]
Street
Address 2:*[ ]
City:* [ Cocoa Beach ] State:* [ FL ] Zip:* [ 34996 ]
Country:* [ United States ]
Telephone Number:* Area Code ([ 555 ]) Tel. No. [ 555 ]-[ 5555 ]
International Info.* Country Code:* [ ] Province [ ]
*International Residents Only
CLick here to update your profile ==>
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II-126
[BioQuest Logo Graphic] Help | Bid Now
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(Register here)
About BioQuest IPO.com Edit Profile
Getting Started
FAQs
Contact Us You must supply your area code and phone number
If you wish to change your profile information, press the "Update" button.
You can click here to change password/keyword info.
Items marked with a red asterisk (*) are required.
username:* JEANNIE123
Courtesy
Title:* [ Mrs. ]
First Name:* [ Jeannie ] e.g. "John"
Last Name:* [ Nelson ] e.g. "Smith"
Email Address:* [ cduncan@sprintmail.com ]
e.g. "someone@somedomain.com"
Street
Address 1:*[ 9801 Beach Front Avenue ]
Street
Address 2:*[ ]
City:* [ Cocoa Beach ] State:* [ FL ] Zip:* [ 34996 ]
Country:* [ United States ]
Telephone Number:* Area Code ([ 555 ]) Tel. No. [ 555 ]-[ 5555 ]
International Info.* Country Code:* [ ] Province [ ]
*International Residents Only
CLick here to update your profile ==>
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FAQs
Contact Us Your profile was updated. Since you changed your state, you
will be asked to verify your state suitability before bidding.
If you wish to change your profile information, press the "Update" button.
You can click here to change password/keyword info.
Items marked with a red asterisk (*) are required.
username:* JEANNIE123
Courtesy
Title:* [ Mrs. ]
First Name:* [ Jeannie ] e.g. "John"
Last Name:* [ Nelson ] e.g. "Smith"
Email Address:* [ cduncan@sprintmail.com ]
e.g. "someone@somedomain.com"
Street
Address 1:*[ 9801 Beach Front Avenue ]
Street
Address 2:*[ ]
City:* [ Cocoa Beach ] State:* [ FL ] Zip:* [ 34996 ]
Country:* [ United States ]
Telephone Number:* Area Code ([ 555 ]) Tel. No. [ 555 ]-[ 5555 ]
International Info.* Country Code:* [ ] Province [ ]
*International Residents Only
CLick here to update your profile ==>
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II-128
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About BioQuest IPO.com Edit Profile
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FAQs
Contact Us Your profile was updated
If you wish to change your profile information, press the "Update" button.
You can click here to change password/keyword info.
Items marked with a red asterisk (*) are required.
username:* JEANNIE123
Courtesy
Title:* [ Mrs. ]
First Name:* [ Jeannie ] e.g. "John"
Last Name:* [ Nelson ] e.g. "Smith"
Email Address:* [ cduncan@sprintmail.com ]
e.g. "someone@somedomain.com"
Street
Address 1:*[ 9801 Beach Front Avenue ]
Street
Address 2:*[ ]
City:* [ Cocoa Beach ] State:* [ FL ] Zip:* [ 34996 ]
Country:* [ United States ]
Telephone Number:* Area Code ([ 555 ]) Tel. No. [ 555 ]-[ 5555 ]
International Info.* Country Code:* [ ] Province [ ]
*International Residents Only
Click here to update your profile ==>
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II-129
PRIVACY STATEMENT SCREENS
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BioQuestIPO.com Privacy Statement
Receipt of Information
Our primary goal is to provide you with a smooth, efficient
and customized experience while you visit this site and bid
on our Auction. To be able to access our prospectus online,
you need to register using our registration form. You will
be required to provide us with your contact information,
such as name, address, phone number and e-mail. For your
protection, you are required to create a unique user name
and password.
You may request a hard copy of the BioQuest prospectus by
clicking on Contact Us.
We automatically track certain information about you based
upon your behavior on our site. This information may include
the URL that you just came from (whether this URL is on our
site or not), which URL you next go to (whether this URL is
on our site or not), what browser you are using, and your IP
address (an anonymous code that identifies the physical
location of your internet service provider). We use this
information solely to conduct internal research on our
users' demographics, interests and behavior to better
understand and serve our users. This information is compiled
and analyzed on an aggregated, and not on an individual,
basis.
If you use a service provided by an affiliated company of
BioQuestIPO.com, the Service Provider may provide personal
information about you and possibly the transaction back to
BioQuestIPO.com.
Our Use of Your Information
We use personally identifiable information about you to
improve our marketing and promotional efforts, to
statistically analyze site usage, improve our content and
product offerings and customize our site's content, layout
and services. We believe these uses allow us to improve our
site and better tailor it to meet your needs now, and for
the future.
We may also use your data to deliver information to you
that, in some cases, is targeted to your interests, such as
targeted banners, new services and promotions. By
registering with BioQuestIPO.com, you expressly agree to
receive this information. You can remove yourself from
participating on this site by sending an email to
info@bioquestipo.com.
We may use your email address, your mailing address and
phone number to contact you regarding administrative
notices, new product offerings and communications relevant
to your use of the site.
We may use information in the file we maintain about you,
and other information we obtain from your current and past
activities on the site, to resolve disputes, and
troubleshoot. At times, we may look across multiple users to
identify problems or resolve disputes, and in particular on
rare occasions, we may evaluate your information to look for
users using multiple User ID's.
Our Disclosure of Your Information
II-130
Unfortunately, due to the existing regulatory environment,
we cannot ensure that all of your private communications and
other personally identifiable information will never be
disclosed in ways not otherwise described in this Privacy
Statement. By way of example (without limiting the
foregoing), we may be forced to disclose information to the
government or third parties under certain circumstances, or
third parties may unlawfully intercept or access
transmissions or private communications. You expressly grant
us permission to disclose any information about you to law
enforcement or other government officials as we, in our sole
discretion, believe necessary or appropriate, in connection
with an investigation of fraud, intellectual property
infringements or other activity that is illegal or may
expose us to legal liability.
The following describes some of the ways that your
personally identifiable information may be disclosed:
Service Providers. BioQuestIPO.com offers a number of third
party services from our site (e.g., escrow, authentication).
If you choose to use these optional services, we will, by
necessity, provide some of your personally identifiable
information to the Service Provider offering such services.
You can, of course, avoid having us make such disclosures by
choosing not to use these services. Because we do not
control the privacy practices of these third parties, you
should evaluate their practices before deciding to use their
services.
BioQuestIPO.com Subsidiaries and Joint Ventures. We will
share much of our data, including personally identifiable
information about you, with our subsidiaries and Joint
Ventures that are committed to serving your person-to-person
investment needs throughout the world. To the extent that
these entities are getting access to your information, they
will treat it at least as protectively as they treat
information they obtain from their other users. We require
our subsidiaries and joint ventures to follow privacy
practices no less protective of all users than the practices
described in our document.
Welcome to the BioQuestIPO.com community!
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II-131
LEGAL DISCLAIMER SCREEN
[BioQuest Logo Graphic] Help | Bid Now
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Getting Started
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BioQuestIPO.com Legal Disclaimer
1. This site is to be used for the purposes of reviewing
BioQuest's prospectus and bidding on BioQuest's self-
underwritten Direct Public Offering (DPO).
2. Only registered bidders of BioQuestIPO.com may bid on
the shares offered on this site.
3. It is the responsibility of the registered bidder to
secure his/her password and user name and
BioQuestIPO.com shall not be responsible for the
unauthorized use of a registered member's username and
password to enter the site and bid on shares.
4. All substantive content of the offering documents
presented herein is the property of BioQuest, and may
be protected by copyright laws and treaties both in the
United States and in foreign jurisdictions.
5. All sales of securities herein are conducted pursuant
to the "Dutch Auction" method and all registered
bidders agree that they have been fully informed of,
and agree to abide by, the standard conduct of the
"Dutch Auction" as set forth in the DPO Tutorial
herein.
6. It is understood and agreed that registered bidders may
bid on our shares after accessing our prospectus. The
registered bidder will signify that he/she has had
access to the prospectus prior to making any bids on
our BioQuest stock. We strongly urge you to read the
prospectus prior to bidding.
7. There are a number of factors that affect the length
and closing date of our auction. We do not and cannot
control these factors.
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II-132
CONTACT US SCREEN
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About BioQuest IPO.com
Getting Started
FAQs
Contact Us
Contact Us
P.O. Box 15
Fairfax Station, Virginia 22039
To request a hard copy of our prospectus you may
phone, fax or email us with your request at the
numbers/address below.
phone: 1-866-468-6228
fax: 1-866-466-3228
info@bioquestipo.com
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II-133
EMAIL RECEIVE BY INVESTORS
Successful Bids:
Purpose: Successful Bid!
Subject: Successful Bid!
To: (Successful bidders)
From: info@bioquestipo.com
Bcc: none
Cc: none
Reply To: info@bioquestipo.com
Attachment: none
Body Attachment:
Dear [Insert member's first name]:
Congratulations! The BioQuestIPO auction has closed and you have a successful
bid! Pending an audit, your shares will be issued in the Delivery Method you
selected when placing your bid. Please note: If you are due a refund, you will
receive a refund check via postal mail within 30 days after the close of the
auction.
Below is a summary of your transaction:
UBN:
Company Name:
Bid Price:
Clearing Price:
Number of Shares:
Total Cost:
Refund Amount:
Thank you for your interest in BioQuestIPO.
II-134
Unsuccessful Bids:
Purpose: Unsuccessful Bid
Subject: Unsuccessful Bid
To: (unsuccessful bidders)
From: info@bioquestipo.com
Bcc: none
Cc: none
Reply To: info@bioquestipo.com
Attachment: none
Body Attachment:
Dear [Insert member's first name]:
We're sorry to inform you that your bid has not been successful. No further
action is required at this time.
Below is a summary of your transaction:
UBN:
Total Received:
Refund Amount:
Thank you for your interest in BioQuestIPO.
Please note: You will receive a refund check via postal mail within 30 days,
after the audit of the auction process has been completed.
II-135
Auction Re-open:
Purpose: Auction Re-open
Subject: Auction Re-open
To: (auction re-open)
From: info@bioquestipo.com
Bcc: none
Cc: none
Reply To: info@bioquestipo.com
Attachment: none
Body Attachment:
Dear [Insert member's first name]:
At this time we have been unable to close our auction, the auction has re-opened
and additional bids are now being accepted. We will be sending a confirmation
email again to inform you when we are intending to "close the auction." At this
time you will be given a final opportunity to cancel your bid.
Thank you for your interest in BioQuestIPO.
II-136
24-hour "End of Auction" Notice
Purpose: End of Auction Notice
Subject: End of Auction
To: Bidders
From: info@bioquestipo.com
Bcc: none
Cc: none
Reply To: info@bioquestipo.com
Attachment: none
Body Attachment:
Dear [Insert member's first name]:
At this time the BioQuestIPO auction is about to close.
Thanks again for your interest in BioQuestIPO! We wish you luck with your bid
and look forward to welcoming you as a shareholder!
Below is a summary of your transaction:
UBN:
Company Name:
Bid Price:
Clearing Price:
Number of Shares:
Total Cost:
Refund Amount:
Thank you for your interest in BioQuestIPO.
Please note: If you wish to cancel your bid you have 24 hours to do so. Those
bids not cancelled within 24 hours will continue to be valid as an accepted bid
and considered for processing and allocation at the close of the auction. In the
event you do cancel your bid, you will receive a refund check via postal mail
within 30 days after the audit of the auction process has been completed.
II-137
Withdrawal
Purpose: Withdrawal
Subject: Withdrawal
To: Bidders
From: info@bioquestipo.com
Bcc: none
Cc: none
Reply To: info@bioquestipo.com
Attachment: none
Body Attachment:
Subject: Withdrawal
Dear [Insert member's first name]:
We regret to inform you that the BioQuestIPO has been withdrawn, unfortunately
we are no longer pursuing an Initial Public Offering. All your monies will be
returned by check from the escrow agent within 30 days.
Below is a summary of your transaction:
UBN:
Company Name:
Bid Price:
Clearing Price:
Number of Shares:
Total Cost:
Refund Amount:
Thank you for your interest in BioQuestIPO.
II-138
Bid Submission
Purpose: Notification of Receipt of Bid Submission
Subject: Notification of Received Bid
To: Bidders
From: info@bioquestipo.com
Bcc: none
Cc: none
Reply To: info@bioquestipo.com
Attachment: none
Body Attachment:
Dear [Insert member's first name]:
You have successfully submitted a bid with BioQuestIPO.com!
Bid Summary:
Company Name: BioQuestIPO.com
Unique Bid #: UBN000010000028
Bid Price: $10.00
# of Shares: 1
Total Cost: $10.00
Your bid is currently being processed. Once all of your funds for the bid have
been received by the escrow agent, your bid will be officially accepted and you
will be notified by email. Note, that you may place more than one bid and can
cancel your bid any time before the auction closes. We will also notify you 24
hours prior to the closing of the auction, that the auction is about to close,
and that you have a final opportunity to cancel your bid. Unless you cancel,
your bid will continue to be valid as an accepted bid, and considered for
processing at the close of the Auction.
Please check the My Bids page frequently for status updates. Should you have any
questions, please email us at bot@209.146.115.242.
Remember, in the event of a tie, shares will be allocated by the time a bid is
officially accepted, on a first come first serve basis.
Thank you.
BioQuestIPO.comYou have successfully submitted
II-139
Welcome
Purpose: Welcome After Registration
Subject: Welcome
To: Newly Registered Bidders
From: info@bioquestipo.com
Bcc: none
Cc: none
Reply To: info@bioquestipo.com
Attachment: none
Body Attachment:
Dear [Insert member's first name]:
Welcome to the BioQuest International, Inc. family and thank you for your
interest in learning about our Direct Public Offering. You have just become part
of history-making in progress, as BioQuest is the first company ever to offer
stock to the public on a self-underwritten basis (Direct Public Offering), over
the Internet and using the Dutch Auction process. We're so happy to have you as
our newest member.
Please be sure to record the following information and keep it in a secure
location as a ready reverence when you visit us again:
Username: SAM123
Keyword: Dr. Bombay
Again, thank you for your interest in BioQuest International, Inc, and we look
forward to having you as one of our valued shareholders.
Sincerely,
Peter J. Ewens
President and CEO
BioQuest International, Inc.
If you lose or forget your password please go to
http://209.146.115.242/hint.asp
II-140
BIOQUEST INTERNATIONAL, INC.
1,000,000 Shares of Common Stock
PROSPECTUS
November 9, 2001
Until December 4, 2001 (25 days after the date hereof), all dealers effecting
transactions in the registered securities, whether or not participating in this
distribution, may be required to deliver a current copy of this prospectus. This
delivery requirement is in addition to the obligation of dealers to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
No dealer, salesperson or other individual has been authorized to give any
information or to make any representations not contained in this prospectus in
connection with the offering covered by this prospectus. If given or made, such
information or representation must not be relied upon as having been authorized
by BioQuest. This prospectus does not constitute as an offer to sell, or a
solicitation of an offer to buy, the common stock in any jurisdiction where, or
to any person to whom, it is unlawful to make such offer or solicitation.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 27. Index to Exhibits
(a)(1) Financial Statements -- Included in prospectus:
Independent Certified Public Accountants' Report.
Balance Sheets as June 30, 2001 and June 30, 2000.
Statements of Operations for the year ended June 30, 2001 and for the
periods from November 4, 1999 (date of inception) to June 30, 2000 and
June 30, 2001. Statements of Changes in shareholder's Equity for the
year ended June 30, 2001 and for the periods from November 4, 1999
(date of inception) to June 30, 2000 and June 30, 2001.
Statements of Cash flows for the year ended June 30, 2001 and for the
periods from November 4, 1999 (date of inception) to June 30, 2000 and
June 30, 2001. Notes to Financial Statements.
(a)(2) Included Separately from prospectus: Consent of Independent Public
Accountants. (See Exhibit 23.2 below.) Other than the Financial Data
Schedule, no schedules are included for the reason that all required
information is contained in the financial statements included in the
prospectus.
(b) Exhibits:
* 3.1.1 Certificate of Incorporation of Registrant.
* 3.1.2 Articles of Amendment to the Certificate of Incorporation
*3.2 Bylaws of Registrant
*3.3 Form of Stock Certificate
*3.4 Subscription Agreement and Power of Attorney. (No longer applicable.)
*5.1 Opinion of Counsel as to the legality of the shares.
*10.1 Employment Agreement between Registrant and Pete Ewens.
*10.2 Employment Agreement between Registrant and Roger Miller.
*10.3 Employment Agreement between Registrant and Dr. James Chappell.
*10.4 Employment Agreement between Registrant and Nicole Shoong.
*10.5 Technology Leasing Agreement between Registrant and MainStreetIPO.com, Inc.
*10.6 Professional Services Agreement between Registrant and Vertical Solutions.
*10.7 Dynamic Web Site Development Letter of Agreement between Registrant and Kirk Cizerle.
*10.8 Letter of Agreement between Registrant and Tani Hurley Public Relations.
*10.9 Letter of Agreement between Registrant and Alexander Creative Consulting, Inc.
*10.10 Agreement of Purchase and Sale and Deposit Receipt between Registrant and Hastings Investment Limited. (No longer
applicable.)
*10.11 Engagement Agreement between Registrant and Ray Stewart, Esq.
*10.12 Engagement Agreement between Registrant and Duncan, Blum and Associates.
*10.13 Warrant Agreement between Registrant and Duncan, Blum & Associates.
*10.14 Dutch Auction Bid Process Website (attached to the prospectus as Appendix II).
*10.15 Technology Leasing Agreement (December 15, 2000) between Registrant and MainStreetIPO.com, Inc.
*10.16 American Stock Exchange Listing Application and Associated Exhibits. (No longer applicable.)
*10.17 Escrow Agreement between Registrant and The American Pacific Bank (reflecting $14,000,000 maximum offering and
restrictions on Service Agent role).
*10.18 Audit Agreement between Registrant and DeLap White Caldwell & Croy, LLP.
*10.19 Bat-Out-Of-Health Website "Screenshots." (No longer applicable.)
*10.20 Transfer Agent Agreement between and Registrant and TransferOnline, Inc.
*10.21 Media Agency Service Agreement between Registrant and Mediasmith, Inc.
*10.22 Programming/Consulting Services Agreement between Registrant and FigLeaf Software, Inc.
*10.23 Website Development Agreement between Registrant and ccplanet.com, Inc. D/B/A ccgenesis.
*10.24 Final Supplemental Solicitation Materials.
*10.25 Investor and Public Relations Agreement between Registrant and Adam Friedman Associates.
SB-2-1
*10.26 Revised Form of Promotional Shares Lock-In Agreement Relating to Registrant's Principals.
10.27 Adoption and Ratification Agreement between Registrant, Joseph Salvani and Globalitronix, Inc.
23.1 Consent of Counsel (Duncan, Blum & Associates).
23.2 Consent of Auditors (Hill, Barth & King LLC).
*These exhibits were filed in the September 26, 2000 Registration Statement
and/or Pre-Effective Amendments No. 1, 2, 3,4, 5, 6, 7,8 and/or 9 respectively
filed March 22, May 16, July 26, August 2 and 27, September 14 and 27 and
October 16, 2001 and October 23, 2001. Since no changes have occurred and/or are
material, these exhibits are not being re-filed and are hereby incorporated by
reference.
[Balance of page intentionally left blank.]
SB-2-2
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and has duly caused this
Post-Effective Amendment No. 1 to the Registration Statement to be signed on its
behalf by the Undersigned, thereunto duly authorized, in the City of Fairfax
Station, State of Virginia, on the 28th day of November, 2001.
BioQuest International, Inc.
By: /s/ Peter J. Ewens
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Peter J. Ewens, Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1 to the Registration Statement has been signed
below by the following persons in their respective capacity as officer and/or
director of the Registrant on the date indicated.
Signatures/Title Date
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/s/ Peter J. Ewens November 28, 2001
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Peter J. Ewens, Chairman and Chief Executive Officer
/s/ Roger Miller November 28, 2001
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Roger Miller, Director, Secretary, Treasurer and
Principal Financial and Accounting Officer
SB-2-3