ITEM 1. BUSINESS
Overview
We are an emerging growth company as defined in Section 2(a)(19) of the Securities Act. We will continue to be an emerging growth company until: (i) the last day of our fiscal year during which we had total annual gross revenues of $1,000,000,000 or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act; (iii) the date on which we have, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or (iv) the date on which we are deemed to be a large accelerated filer, as defined in Section 12b-2 of the Exchange Act.
As an emerging growth company, we are exempt from:
|
·
|
Sections 14A(a) and (b) of the Exchange Act, which require companies to hold stockholder advisory votes on executive compensation and golden parachute compensation;
|
|
·
|
The requirement to provide, in any registration statement, periodic report or other report to be filed with the Securities and Exchange Commission (the “Commission” or “SEC”), certain modified executive compensation disclosure under Item 402 of Regulation S-K or selected financial data under Item 301 of Regulation S-K for any period before the earliest audited period presented in our initial registration statement;
|
|
·
|
Compliance with new or revised accounting standards until those standards are applicable to private companies;
|
|
·
|
The requirement under Section 404(b) of the Sarbanes-Oxley Act of 2002 to provide auditor attestation of our internal controls and procedures; and
|
|
·
|
Any Public Company Accounting Oversight Board (“PCAOB”) rules regarding mandatory audit firm rotation or an expanded auditor report, and any other PCAOB rules subsequently adopted unless the Commission determines the new rules are necessary for protecting the public.
|
We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(1) of the Jumpstart Our Business Startups Act.
We are also a smaller reporting company as defined in Rule 12b-2 of the Exchange Act. As a smaller reporting company, we are not required to provide selected financial data pursuant to Item 301 of Regulation S-K, nor are we required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002. We are also permitted to provide certain modified executive compensation disclosure under Item 402 of Regulation S-K.
The Company
TeleHealthCare, Inc., a Wyoming corporation, (“TeleHealthCare” “Company” “we,” “us,” or “our” “THC”) was incorporated on December 10, 2012. TeleHealthCare develops telehealth platforms. TeleHealthCare develops platforms in the telehealth industry. Its first platform the Company developed is called CarePanda. Currently, CarePanda set up as a division of TeleHealthCare. CarePanda is an online software that helps people, family members and caregivers manage, share and control their own, their family's or their customers healthcare information. CarePanda links people and healthcare information together at the point of care and works on multiple platforms including Internet enabled devices and mobile phones. The Company plans to develop similar platforms for clients.
Over the next several months, Telehealthcare.com will be working with strategic partners and service providers to roll out and demonstrate the abilities of our CarePanda app. Initially Telehealthcare.com will focus on physician groups, mental health providers, pharmacy solutions, and a few other niche specialty medical service providers. Each of these market segments have strong, growing demand for HIPAA compliant solutions and telehealth services. The goal in the next six to nine months is to build a consistent, growing, recurring revenue base and develop sales with key customers in key target markets.
In December of 2016, Telehealthcare signed Exclusive Reseller Agreement with Re-Habit, Inc. for the licensing and resell of CarePanda Secure Messaging App to the Detox and Residential Treatment industry. The Detox and Residential Treatment Centers are under increased regulatory pressure to meet Health Insurance Portability and Accountability Act (HIPAA) compliance. Some centers are even required to meet Joint Commission: Accreditation, Health Care, Certification (JCAHO) for the retention and storage of healthcare communication to continue their operations and association with hospitals, Accountable Care Organizations (ACOs) and insurance providers.
In California alone, there are over 1,000+ Detox and Rehabilitation facilities. As of December 2016, Re-Habit has already registered several facilities into pilot programs with a goal of 100 facilities for 2017.
Per Telehealthcare’s Press Release on December 14, 2016:
Telehealthcare, Inc. Announces Exclusive Reseller Agreement for CarePanda HIPAA Compliant Messaging App
"CarePanda offers the opportunity for Rehabilitation facilities to meet current HIPAA and JCAHO regulations." Stated Re-Habit's COO Mathew Alaimo. "Alcohol and drug addiction is a major problem in this country and people recovering from this disease often have their medical information exposed to employers or friends without their consent. With CarePanda, rehab facilities can not only meet regulatory and security compliance but also automate their business operations and introduce new business services such as remote communication with medical staff, nurses, labs, pharmacies and others. The result is improved tracking and management of medical events and activities."
CarePanda secure messaging app is available for both Apple and Android mobile and tablet devices. CarePanda can be used in any medical setting including hospitals, medical groups, long term settings, pharmacies, labs, imaging, billing, nurse stations, emergency rooms, and even from home or the medical office.
CarePanda App is the first step of securing communication between medical providers, doctors, patients, labs, pharmacist and many others. By creating an ecosystem of providers, vendors and patients on the CarePanda App, Telehealthcare will be able to leverage the user base for additional revenue opportunities. The ecosystem will also provide a basis of customers and services that the company can work with as new regulations get passed in the Telehealthcare space.
Our Market
Healthcare Ecosystem
The healthcare ecosystem is undergoing major changes. This includes:
|
·
|
New regulatory changes with “Obama Care”
|
|
·
|
Increasing healthcare costs
|
|
·
|
Growing shortage of healthcare resources
|
|
·
|
Source of healthcare provisioning is changing (e.g., retail health e)
|
|
·
|
Quality of care is becoming more important
|
|
·
|
More technology and more people are being added to the system
|
|
·
|
Smart devices, tablets, phones and WiFi devices make it easier to monitor and collect healthcare information.
|
Millions of Americans have at least one chronic care condition. Anyone who has a loved one with a chronic condition or extended healthcare issue knows the difficulty of managing, monitoring and communicating their care between family members, caregivers and other medical providers.
Problem for Consumers - You Own Your Healthcare Record
Under new medical guidelines consumers now own their own healthcare record which presents several challenges:
|
·
|
How will you collect and manage your healthcare information?
|
|
·
|
How will you access it?
|
|
·
|
How will you share it with family members or caregivers?
|
|
·
|
How will you secure it?
|
CarePanda will attempt to make it easy for family’s to collect health information anywhere and everywhere they go via mobile phone, iPAD, computer, fax, email or Internet kiosk. In addition, CarePanda will make it easy to capture the information customers need, store it for future reference and share it with others including family members, caregivers, medical professionals, legal, other family members and more.
CarePanda works by a customer creating an online account and entering their healthcare information into online forms or uploading their medical information documents into their online account. Information and documents can be shared by email, fax or text message based on the customer settings to family members, caregivers or other medical providers.
CarePanda will provide a comprehensive healthcare information management (HIM), service to customer. By designing and developing our service to be a low-cost, easy-to-use application that is delivered through a standard Web browser, we substantially reduce many of the traditional processes and complexities of managing your healthcare information.
Our service will help customers more effectively manage their healthcare information. We intend to market our service on a subscription basis, primarily through our direct sales efforts and also indirectly through partners.
The pervasiveness of the Internet, along with the increase in adoption of smart phones and tablet devices will make it easier for users to track and manage information. TeleHealthCare
Cloud application services enable businesses to subscribe to a wide variety of application services that are developed specifically for, and delivered over, the Internet on an as-needed basis with little or no implementation services required and without the need to install software.
Existing Problem for Business – Regulations
As part the new HITECH Act and American Recovery and Reinvestment Act (“ARRA”), healthcare providers are incentivized to implement electronic health records and to meet “Meaningful Use Guidelines” (“MUGs”). It is not mandatory that the healthcare providers meet these requirements but penalties will begin in 2015.
Under these guidelines, CarePanda helps healthcare providers meet the following MUGs:
Patient Discharge Meaningful Use Guideline (“MUG”)
Healthcare provide must provide information to patient including “compliance issues, dietary advice, follow-up monitoring, and information about the potential for adverse drug reactions & interactions including when and when not to call a doctor”
Patient Rights MUG
Healthcare providers must “Provide patients and families with timely access to data, knowledge, and tools to make informed decisions and to manage their health”
Transition Requirements MUG
Healthcare providers must provide electronic health information “During transition of patient care…” and make sure that information is communicated to family or other care taker.
HIPAA - Privacy & Security Compliance
HIPAA or Healthcare Insurance Portability and Accountability Act is existing legislation that requires healthcare providers to keep healthcare information confidential. Several large institutions have been fined significantly for not protecting the healthcare privacy of their patients.
Our Solution
CaraPanda will put you in control of your healthcare information and bridges the gap between healthcare providers and family members. CarePanda works like a smart dashboard and can easily collect information and automatically alert you, family members or caregivers about specific healthcare changes or issues. CarePanda helps you manage the care of others even when you're not there.
For example, in a situation where an individual is discharged from a hospital and transported to an assisted living facility. CarePanda provides the tools that allow the individual and other family members to receive an update from the time the individual is discharged from the hospital to each time a caregiver visits the individual in the assisted living facility. CarePanda also has the ability for individuals and other family members to update or add notes to the individual’s account from their mobile phone or iPAD as well as maintain a list of the individual’s personal belongings and online files of her medical directives.
Managing care can be a daunting task including prescriptions, medical bills, caregiver schedules, lab results, physician office visits, medical equipment, insurance, Medicare and more! CarePanda allows clients to manage and monitor care regardless of where they are or what they are doing that day. By using CarePanda, families free up valuable time, can make more informed healthcare decisions and can be reassured that someone is able to manage care even on the days they are not available. It also allows customers to receive email alerts or even give permissions to caregivers or staff at the assisted living center to update status, send mobile pictures or fax bills directly into their CarePanda account.
CarePanda is also a critical tool for hospitals, nursing homes and other healthcare facilities to help them document and comply with an increasing array of regulations. Representatives from these facilities have been involved in the development of the CarePanda platform and view a co-branded or private label version of CarePanda as a key tool in meeting compliance requirements. Facilities would use CarePanda to improve the patient discharge process and extend their brand into the community.
BUSINESS MODEL & MARKET OPPORTUNITIES
CarePanda has a large target market focused on three (3) major revenue opportunities.
|
1)
|
B2C - Business to Consumer Model.
|
Consumer model allows families to sign up for free and purchase monthly add-on services. Target markets are caregivers, snowbirds, court appointed care and families with loved ones having a chronic condition.
|
2)
|
B2B - Business to Business Model.
|
CarePanda will license and create recurring revenue by co-branding with hospitals, medical groups, assisted living centers, skilled nursing facilities and other medical providers. There is significant awareness and concern among providers of how they are going to solve regulatory changes. Hospitals alone estimate regulatory changes will cost between $50 million to $100 million dollars for each facility. CarePanda solves this problem by creating a cost effective tool that will be utilized by staff at the point of patient discharge. There are approximately 6,000 hospitals, 34.9 million hospital discharges per year, 102 million outpatient visits per year, over 1 million residents in 33,000 assisted living centers and over 1.8 million skilled nursing rooms in the United States.
|
3)
|
OEM - Private Label Licensing Model.
|
Initial focus is on the B2C and B2B models. In the future CarePanda will license and provide private label solution for companies who want to create a new revenue model based on their brand and extension of their existing services. Examples include home healthcare providers, retail, medical device companies, insurance companies, self insured employers, TPAs, tele-healthcare providers, schools, universities, non-government organizations (NGOs) such as the YMCA and electronic health record (EHR) companies. CarePanda has already been approached by one of the nation’s largest hearing aid manufacturers to private label a tool for their audiology clinics.
CarePanda will address the market at the point of care through industry relationships and regulatory pressures being put on hospitals and nursing homes. Market share will be driven by several factors:
|
·
|
Leveraging key industry contacts
|
|
·
|
Accessibility of CarePanda on multiple platforms
|
CURRENT STATUS
Telehealthcare made great strides this year with our CarePanda HIPAA compliant secure messaging app. In October of 2016 Telehealthcare finished the BETA of the App and launched CarePanda app in the Apple and Android App stores.
Per Telehealthcare’s press release on October 4
th
, 2016:
Telehealthcare, Inc. Announces Launch of CarePanda Secure Messaging App for Apple and Android
CarePanda is a revolutionary new app that facilitates secure messaging between medical providers including doctors, nurses and other care teams. CarePanda app is easy to use, doctors or nurses can quickly share text messages, documents, PDFs, images or medical forms with other medical professionals or patients. CarePanda meets all State retention laws, HITECH, State pharmacy regulations, HIPPA and Joint Commission guidelines.
The advantages of CarePanda App:
|
·
|
Meets compliance regulations for Federal and State Guidelines, including HIPPA compliance
|
|
·
|
Securely sends documents, images, or forms within the app
|
|
·
|
Maintains record retention of all communication year over year
|
|
·
|
Care teams, doctors, and staff can see when another person has "viewed" their message
|
|
·
|
A lost phone or tablet messages can be protected without losing the communications
|
|
·
|
PDF forms can be integrated within the app for signature and workflow
|
|
·
|
Automated OUT OF OFFICE replies
|
|
·
|
Easily add or remove medical providers to any conversation
|
CarePanda App easily integrates with existing processes and medical forms while adding security and meeting all Federal and State compliance requirements. Forms can be integrated and customized for your medical facility including: admissions, advance directives, arbitration agreements, BAA agreements, arbitration agreements, certification statements, financial arrangements, patient intake forms, outpatient registration, personal funds, social workers, therapy forms, lab forms and more.
Over the next several months, Telehealthcare.com will be working with strategic partners and service providers to roll out and demonstrate the abilities of our CarePanda app. Initially Telehealthcare.com will focus on physician groups, mental health providers, pharmacy solutions, and a few other niche specialty medical service providers. Each of these market segments have strong, growing demand for HIPAA compliant solutions and telehealth services. The goal in the next six to nine months is to build a consistent, growing, recurring revenue base and develop sales with key customers in key target markets.
In December of 2016, Telehealthcare signed Exclusive Reseller Agreement with Re-Habit, Inc. for the licensing and resell of CarePanda Secure Messaging App to the Detox and Residential Treatment industry. The Detox and Residential Treatment Centers are under increased regulatory pressure to meet Health Insurance Portability and Accountability Act (HIPAA) compliance. Some centers are even required to meet Joint Commission: Accreditation, Health Care, Certification (JCAHO) for the retention and storage of healthcare communication to continue their operations and association with hospitals, Accountable Care Organizations (ACOs) and insurance providers.
In California alone, there are over 1,000+ Detox and Rehabilitation facilities. As of December 2016, Re-Habit has already registered several facilities into pilot programs with a goal of 100 facilities for 2017.
Per Telehealthcare’s Press Release on December 14, 2016:
Telehealthcare, Inc. Announces Exclusive Reseller Agreement for CarePanda HIPAA Compliant Messaging App
"CarePanda offers the opportunity for Rehabilitation facilities to meet current HIPAA and JCAHO regulations." Stated Re-Habit's COO Mathew Alaimo. "Alcohol and drug addiction is a major problem in this country and people recovering from this disease often have their medical information exposed to employers or friends without their consent. With CarePanda, rehab facilities can not only meet regulatory and security compliance but also automate their business operations and introduce new business services such as remote communication with medical staff, nurses, labs, pharmacies and others. The result is improved tracking and management of medical events and activities."
CarePanda secure messaging app is available for both Apple and Android mobile and tablet devices. CarePanda can be used in any medical setting including hospitals, medical groups, long term settings, pharmacies, labs, imaging, billing, nurse stations, emergency rooms, and even from home or the medical office.
CarePanda App is the first step of securing communication between medical providers, doctors, patients, labs, pharmacist and many others. By creating an ecosystem of providers, vendors and patients on the CarePanda App, Telehealthcare will be able to leverage the user base for additional revenue opportunities. The ecosystem will also provide a basis of customers and services that the company can work with as new regulations get passed in the Telehealthcare space.
PRODUCT DETAILS
|
·
|
Easy to use “Centers” make it easy for people to track, manage and centralize multiple sets of information
|
|
-
|
Family Center – family management
|
|
-
|
Health Center – personal health records, HIPAA
|
|
-
|
Legal Center – legal documents and information
|
|
-
|
Finance Center –medical and insurance billing / management
|
|
-
|
House & Home Center – home inventory, home monitoring
|
|
-
|
Each person is assigned an unique number and can receive information by email, text message, voice mail (speech to text) or fax.
|
|
·
|
“Opt In / Opt Out” multi-user security
|
|
-
|
You determine who has access to your CarePanda data by sending them an email.
|
|
-
|
You always see who can access to your data and who’s data you can view or edit on every page.
|
|
·
|
View 1 / View Many feature
|
|
-
|
On every page you can view your data, other “opt in” users data or all data.
|
|
-
|
Example, caregiver: on the calendar page or to-do-list page or medication page they can view individual or all users data on one page to better manage their services.
|
|
·
|
CompareCare Feature – Save Money& Improve Life (Augmented Content)
|
|
-
|
Each page CarePanda allows you to compare data to other users on CarePanda site or compare yourself to local, county, state or national data.
|
|
-
|
Doctors name – is he/she State Certified, have AMA number? Board certified? School?
|
|
-
|
Medical bill cost comparison and validation (improper billing codes, over-billing, negotiation lower rates…)
|
|
-
|
Medications - on medication page you see recent news on drug, FDA link and drug recalls
|
|
-
|
Allergies = # of people on CarePanda who have same allergy, prevalence by city, state, etc.
|
|
-
|
Maps and directions for addresses
|
|
-
|
Emergency Info page automatically includes 911 and Poison Control, etc. Link to CPR instructions…
|
|
·
|
CompareCare Private Label / OEM
|
|
-
|
Licensed organizations can setup a Private Label version of CarePanda that allows them to use the ComapreCare just to compare and view data between their users. For example, a large company like Ford Motors can setup a Private Label version of CarePanda and have statistics compare and link users data for Allergy information, Chronic Diseases, etc.
|
|
·
|
Integrated Alerts & Reminders
|
|
-
|
Each CarePanda page allows you to receive alerts by email or text message.
|
|
-
|
Reminders – Daily Reminder or Weekly
|
|
·
|
Integrated Log and Journal
|
|
-
|
Integrated log on each page let’s track and manage activities on a daily basis similar to a daily journal.
|
|
-
|
Each page and record has a create date, created by, last modified date and modified by
|
|
-
|
Each page and record has a history that can be viewed by feature (log page of all changes highlighted) – Page History Log
|
|
-
|
During a major medical condition create a “transition of care” list that tracks patient from facility to facility (ambulance, hospital, outpatient, acute care, assisted living, home)…
|
|
-
|
Security and audit trail of all of your information.
|
|
-
|
Last login date, last time people viewed your data and on what page.
|
|
-
|
Centralized location for family and healthcare information
|
|
-
|
Audit trail of all transactions
|
|
-
|
Opt In / Opt Out data access
|
|
-
|
HIPAA compliance management
|
|
-
|
Integrated eDocument Signing / Online Document Signing
|
|
-
|
Home monitoring via video over IP (low cost video monitoring for up to 4 months)
|
|
-
|
Online medical dictionary in family terms…
|
|
·
|
24/7 Chat and Phone Support
|
|
-
|
Services: Medical record retrieval service, telehealth service,
|
|
·
|
Integrated Notes on each Page
|
|
-
|
Running blog at bottom of each page to leave notes and have discussion thread.
|
*********************************************
Main B2C Solutions:
|
·
|
You –
managing daily family care and tasks
|
|
·
|
Family Care in Assisted Living Centers –
Grandma & Grandpa, parents or special needs children
|
|
·
|
Court Appointed Care –
custody cases, divorce court, etc.
|
|
·
|
Snow Birds –
Traveling from one location to another
|
Main B2B Solutions:
|
·
|
Transition of Care solutions / CMS reimbursement
|
|
·
|
Retail Health
|
|
·
|
Hospital / Medical Group - OEM / Private Label
|
|
·
|
Assisted Living Centers
|
|
·
|
Home Healthcare Providers
|
|
·
|
TPAs
|
|
·
|
Schools
|
CarePanda is an online family planner and healthcare organizer software that allows Website Users (“Users”) to securely track and manage family and healthcare information (collectively the “
Website
” or “
CarePanda
”).
CarePanda is divided up into
Centers
including:
|
·
|
My Account Center
|
|
·
|
Family Center
|
|
·
|
Health Center
|
|
·
|
Legal Center
|
|
·
|
Finance Center
|
|
·
|
House & Home Center
|
Each Center provides
Online Forms
to track and manage data and content including family information, health information, legal information, finance information and house and home information.
Online Forms
include data tables, input tables, reports, calendar views, field views, reference materials, dictionary content, notes, blogs, guides,
documents
, images, PDF files, faxes, emails, text messages and other online displays of data tied to specific information for each
Center
.
Online Forms can be searched, sorted or filtered by the data contained in each Online Form (collectively “
Search
” or “
Filter
”)
Website Users (“
Users
”) are people who have registered for an online account to the CarePanda website and who have permission and control over their CarePanda Website and all the data on each Center on that website. Permission and control includes the ability to create new content, edit content, delete content, allow other users to access their Centers content for each Center and the ability to prevent other users from accessing their Centers content and information. Users can see a complete audit trail of all users on each Online Form and each Center and Opt-In or Opt-Out to view or edit data on any Online Form.
Documents
are online documents uploaded, faxed or emailed to an Online Form on the CarePanda Website. Examples include PDF Files, Microsoft Word Documents, Microsoft PowerPoint Documents, Microsoft Excel Documents, Open Office Documents, images, Image files, JPG files, PNG files, GIF files, and other proprietary and non-proprietary document files.
Opt-In Security (“Opt-In”), Opt-Out Security (“Opt-Out”) and Audit Trail Feature (“Audit Trail”):
For each
Online Form
users have
Opt-In
and
Opt-Out User Security
and complete
Audit Trail
of the information on that page and form:
|
·
|
Opt In Security lets other users
view
the data on this page
|
|
·
|
Opt In Security lets other users
edit
the data on this page
|
|
·
|
Opt Out Security prevents other users from
viewing
this page
|
|
·
|
Opt Out Security prevents other users from
editing
this page
|
|
·
|
Audit Trail Report showing what users currently can view or edit this page
|
|
·
|
Audit Trail Date and Time Stamp showing what data users created or modified last
|
View/Viewing/View Permissions
– A user can only view the data on the Online Form. They cannot add new content, change, edit, modify, delete or change the data in any way for this Online Form.
Edit/Editing/Edit Permissions
– A user can view and edit the data on the Online Form. They can add new content, change, edit, modify, delete or change the data on this Online Form.
Audit Trail
– AuditTrail is a report that includes the date, time and Opt-In users who currently have View and Edit access to this
Online Form
. The Audit Trail also shows which users previously had View or Edit access to the
Online Form
.
HIPAA Compliance
– Some sections of the Website require an Opt-In user to meet HIPAA Compliance to access specific users Online Form. HIPAA Compliance information will need to be electronically signed and agreed to by each Opt-In user access HIPAA compliant Online Forms on the CarePanda website.
View One, View Many Feature:
For each
Online Form
users have the ability to view other user’s data and information using
Opt-In Security and Opt-Out Security and Audit Trail Feature
via an online drop down box.
Users can select to view their data (“My Data” or “My Information”) or to view other users’ data (“Other User Data”) who have provided Opt-In Audit Trail permissions or to view or all users data (“All Users Data”) on the same
Online Forms
for all Opt-In Audit Trail permission users’ data including “My Information”.
The View One, View Many Feature allows users to view all family or Opt-In permissible data on the same page without having to search, filter or sort on family or Opt-In permissible data individually or one at a time.
The View One, View Many Feature allows users to edit all family or Opt-In permissible data on the same page without having to search, filter or sort on family or Opt-In permissible data individually or one at a time.
Unified Communications:
For each user on the website, they will be assigned a unique Unified Communications ID which will be used to send and receive information from any
Online Form or Feature
on the website. The unique Unified Communications ID will allow users and Opt-In users to send a fax, send a text message (from mobile phone or any text enabled website or device) or send email to any users account and Online Form.
Unified Communications will also be used to send and receive information from any
Online Form or Feature
on the website to import electronic data sets such as a comma-delimited text files, database files, HL7 healthcare files, public data records including Federal and State electronic data sets or other electronic data sets.
Unified Communications will allow CarePanda users to view, edit, manage, send, receive data for Online Forms using mobile devices, hand-held devices and websites.
CompareCare
Each page on the website allows you to compare data to other users on the website and to compare your data to other online or offline data sets including local, county, state or national data sets and reports, industry data sets and reports, publically available data sets and reports and CarePanda licensed data sets and reports.
Examples of CompareCare:
|
·
|
When a user puts in a doctors name, CompareCare checks the to see if doctor is State Certified, Board Certified, has a AMA number, where graduated school and also checks available online and offline data sets and reports for other comparative data.
|
|
·
|
When a user enters a medical bill, CompareCare checks to see the cost comparison of Medicare and Medicaid data sets, State Medical Data Sets, Comparison of cost from other users on CarePanda website and Industry available or Industry licensed data sets to compare bill cost to other medical costs, to check bill for improper billing codes, duplicate billing codes or over-billing
|
|
·
|
When a user enters a medication or drug, the user will see how many other users on CarePanda are taking this drug and view recent news from the FDA website on drugs, drug recalls and drug comparisons on generics, pricing, brands, drug formulas and more.
|
|
·
|
When a user enters allergy, users on CarePanda will see how many people in the same city, state or nation who have same allergy and see statistical data and prevalence by ZIP Code, city, county, state or other comparison data.
|
|
·
|
Also see CompareCare Private Label capabilities below (“
Private Label
”)
|
Online Form - Alerts and Notifications:
Alerts and Notifications is an integrated feature on each Online Form that are Text Messages, Emails or Automated Phone Calls. CarePanda allows users to set Alerts and Alarms on each
Online Form
allowing users to receive a Text Message, Email or Automated Phone Call for each activity on an Online Form. Activities for Online Forms include New Data, Edit Data and Deleted Data on each Online Form and New or Updated CompareCare Data and Opt-In User(s) and Opt-Out User(s).
Alerts and Notifications
can be set to be received immediately, daily, weekly or monthly for each
Online Form
.
Online Form - Notes:
Notes is an integrated feature on each Online Form that is a data field at the bottom of each Online Form. Notes is text that can be published on any Online Form by any Opt-In user. Notes will collect at the bottom of each Online Form and serve as a blog, discussion group or forum to capture notes or discuss information related to the Online Form. Only Opt-In users can view notes and only Opt In users with edit capability can change or delete a note.
Online Form – Journal:
Journal is an integrated feature on each Online Form that allows users to keep a journal of activities for each Online Form. The Journal includes the ability to track a activity including the date, time, people, user, location, amount, level, create date, create user, modified date, modified user and other Journal related activities for each Online Form. Only users or Opt-In users with edit permissions can use the Journal on each Online Form. Journal Activities are added to a central Journal Online Form which can be viewed in the users My Account Center.
Online Form – Resources:
Resources is an integrated feature on each Online Form that are online data sets publically available on the Internet, print or on CarePanda website that allow users to look-up and reference information about data in their Online Forms. This may include medical dictionaries, drug databases, maps, directions, statistics, tips, resources, websites, phone numbers, databases, lists, and more. Examples include medical dictionary, hospital address list, physician address list, online map with directions, etc.
Online Form
–
Expenses:
Expenses is an integrated featured on each Online Form that allows users to keep track of expenses and costs related to data on that Online Form. For example Expenses help track the cost of drugs on the Medication Online Form or the cost of a Surgeries, Allergies or Test Results on the corresponding Online Form. Expenses capture the date, time, provider, location, cost, insurance coverage and related expense information. Expenses are captured and totaled by month and year under the Finance Center.
Online Form – Print and Export Features:
CarePanda website allows Users to Print or Export their Online Form data. Each user can print from their online device to a printer of a Online Form, create a downloadable PDF file of a Online Form, download a text, comma-delimited file of a Online Form, email a Online Form, Fax a Online Form or Text Message a Online Form. Print and Export can also be used from within any Search, Sort or Filter.
My Account:
CarePanda website allows users to manage their Account (My Account) online including change passwords, track and manage Opt-In and Opt-Out Security Users, track and manage HIPAA compliance for their healthcare information and keep a complete audit trail of each Online Form, mange Journal entries, Notes and Expenses. Other tools include the ability to set Alerts and Alarms on each Online Form, export data for each Online Form, Compare data with other CarePanda users, etc.
Private Label & Co-Branding:
CarePanda website can be private labeled or co-branded for other companies. This feature allows licensed companies to brand or private label CarePanda website and add their own sponsoring information to the website. Private Label companies can also create closed data sets that let them compare data using the “CompareCare” tools just between their company or organization for users on the CarePanda website.
COMPETITION
There are several healthcare websites that offer personal health records (Google Health, Microsoft Health Vault), diet or health advice (WebMD, Health Grades), healthcare portals (Med Seek) or even caregiver planning websites.
CarePanda is unique and completely different offering from these competitors. CarePanda links people and healthcare information together at the point of care, works on multiple platforms, solves a number of regulatory problems for hospitals and nursing homes and is not dependent on integration with electronic health records.
CarePanda looks at tools and features such as document libraries, fax systems, picture libraries and text messaging that are not dependent on electronic health records and not available on other systems. CarePanda also focuses on tools that help people manage their lives and care including home inventory tracking, emergency planning, medical bill management tools and much more. These unique CarePanda solutions are not available in other competitor systems.
Competitive Comparison
Competitive Company
|
|
Key Advantage Over
|
|
Key Threat From
|
|
|
|
|
|
Google Health
Microsoft Health Vault
|
|
CarePanda works on multiple platforms, meets regulatory requirements, provides more features and can be private labeled or co-branded.
|
|
Google and Microsoft have extensive resources and funds
|
|
|
|
|
|
WebMD
Health Grades
MedSeek
|
|
CarePanda works on multiple platforms, meets regulatory requirements, provides more features and can be private labeled or co-branded.
|
|
WebMD's website could offer similar tools to CarePanda and their Medical Manager product for physicians could be used to create an integrated solution between families and their doctors. MedSeek offers hospital medical portals that could be used to offer similar services as CarePanda
|
|
|
|
|
|
Intuit
|
|
CarePanda works on multiple platforms, meets regulatory requirements, provides more features and can be private labeled or co-branded.
|
|
Intuit Quicken Medical Expense Manager is a great tool for families to track medical expenses. Intuit could decide to offer similar services.
|
DESCRIPTION OF PROPERTY
Our corporate offices are subleased through GoBig Inc. for $700 per month. They are located at 1031 Calle Recodo, San Clemente, CA 92673. The phone number is 1(888) 99PANDA.
ITEM 1A.
RISK FACTORS
An investment in the Company is highly speculative in nature and involves an extremely high degree of risk.
You should be aware that there are various risks to an investment in our common stock. You should carefully consider these risk factors, together with all of the other information included in this Form 10-K, before you decide to invest in shares of our common stock.
If any of the following risk were to occur, then our business, financial condition, results of operations and/or prospects could be materially adversely affected. If that happens, the market price of our common stock, if any, could decline, and investors may lose all or part of their investment.
Risks Related to the Business
TeleHealthCare has minimal financial resources. Our independent registered auditors’ report includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.
TeleHealthCare is an early stage company and has minimal financial resources. We had a cash balance of $19,414 as of September 30, 2016. We have working capital deficit of $177,726 and accumulated deficit of $632,553 at September 30, 2016. Our independent registered auditors included an explanatory paragraph in their opinion on our financial statements as of and for the year ended September 30, 2016 that states that Company losses from operations raise substantial doubt about its ability to continue as a going concern. We may seek additional financing. The financing sought may be in the form of equity or debt financing from various sources as yet unidentified. No assurances can be given that we will generate sufficient revenue or obtain the necessary financing to continue as a going concern.
Our current resources and source of funds, which primarily consist of our fundraising and debt are sufficient to keep our business operations functioning for the next twelve months. We do not have a formal agreement with our president and chief executive officer to fund the Company’s working capital needs; however our president and chief executive officer’s current plan is to do the majority of the work on his own without cash compensation while he seeks other sources of funding. The Company has started the development of an initial design and framework of its proposed CaraPanda portal platform, as well as through the efforts of a software development firm which the Company has been working with on an as “needed basis.” We currently spend on average between $5,000 and $15,000 per month in operational expenses. We have generated minimal revenues from our business, and our expenses will be accrued and deferred until sufficient financing is obtained or our president and chief executive officer or others who know our president and chief executive officer loans the necessary funds to pay for these expenses. No assurances can be given that we will be able to receive funds from our president and chief executive officer or others to continue our operations beyond a month-to-month basis.
TeleHealthCare is and will continue to be completely dependent on the services of our president, chief financial officer, and vice president of sales, the loss of whose services may cause our business operations to cease, and we will need to engage and retain qualified employees and consultants to further implement our strategy.
TeleHealthCare’s operations and business strategy are completely dependent upon the knowledge and business connections of Cahill, Donahue, and Folsom our officers. They are under no contractual obligation to remain employed by us. If any should choose to leave us for any reason or becomes ill and is unable to work for an extended period of time before we have hired additional personnel, our operations will likely fail. Even if we are able to find additional personnel, it is uncertain whether we could find someone who could develop our business along the lines described in this Form 10-K. We will likely fail without the services of our officers or an appropriate replacement(s).
We intend to acquire key-man life insurance on the life of Mr. Cahill naming us as the beneficiary when and if we obtain the resources to do so and if he is insurable. We have not yet procured such insurance, and there is no guarantee that we will be able to obtain such insurance in the future. Accordingly, it is important that we are able to attract, motivate and retain highly qualified and talented personnel and independent contractors.
Cahill, Donahue, and Folsom current employment does not limit or restrict them from being involved with our Company, and their employment allows them the flexibility to provide at least 20 hours per week to our Company.
Because we have only recently commenced business operations, we face a high risk of business failure.
The Company was formed in December 2012. All of our efforts to date have related to developing our business plan and beginning business activities. Through September 30, 2016, we had no material operating revenues. We face a high risk of business failure. The likelihood of the success of the Company must be considered in light of the expenses, complications and delays frequently encountered in connection with the establishment and expansion of new businesses and the competitive environment in which the Company will operate. There can be no assurance that future revenues will occur or be significant enough or that we will be able to sell its products and services at a profit, if at all. Future revenues and/or profits, if any, will depend on many various factors, including, but not limited to both initial and continued market acceptance of the Company’s website and the successful implementation of its planned growth strategy.
The Company has commenced internally developing our telehealth portal. In the early stages of our operations, we will continue to keep costs to a minimum. The cost to develop our business plan as currently outlined may be in excess of $1,000,000. We will need additional funds to market our website. If we are unable to obtain adequate funding or financing, the Company faces the ultimate likelihood of business failure. There are no assurances that we will be able to raise any funds or establish any financing program for the Company’s growth.
We may not have or ever have the resources or ability to implement and manage growth strategy.
Although the Company expects to experience growth based on being able to implement its business plan, actual operations may never occur because the business plan may never be implemented because of lack of funds to do so. If the Company’s business plan and growth strategy are implemented, of which no assurances can be given, a significant strain on the Company’s management, operating systems and/or financial resources will be imposed. Failure by the Company’s management to manage this growth, if it occurs, or unexpected difficulties encountered during growth, could have a material adverse impact on the Company’s results of operations or financial condition.
The Company’s ability to operate profitably will depend upon a number of factors, including (i) identifying distribution channels, (ii) generating sufficient funds from our then existing operations or obtaining third-party financing or additional capital, (iii) the Company’s management team and its financial and accounting controls and (iv) staffing, training and retaining of skilled personnel, if any at all. Certain of these factors will be beyond the Company’s control and may be adversely affected by the economy or actions taken by competing companies. There can be no assurance that the Company will be able to execute and manage a growth strategy effectively or at all.
We may not be successful in hiring technical personnel because of the competitive market for qualified technical people.
The Company's future success depends largely on its ability to attract, hire, train and retain highly qualified technical personnel to provide the Company's services. Competition for such personnel is intense. There can be no assurance that the Company will be successful in attracting and retaining the technical personnel it requires to conduct and expand its operations successfully and to differentiate itself from its competition. The Company's results of operations and growth prospects could be materially adversely affected if the Company were unable to attract, hire, train and retain such qualified technical personnel.
Our reliance on referrals from outside contacts to develop business may not be effective.
The Company initially will rely on our vice president of sales, Mr. Folsom and our chief financial officer, Mr. Cahill and Mr. Donahue, for a majority of its leads and believes that independent outside sales reps will also be an important source of sales referrals in the foreseeable future. However, as is typical within the industry, there are no contractual requirements that an outside sales person use or recommend the Company. We currently have no contracts or agreements in place with any outside sales professional. No assurances can be given that using independent outside sales reps will result in any meaningful numbers of sales leads or referrals.
We will face competition from companies with significantly greater resources and name recognition.
The markets in which the Company will operate are characterized by intense competition from several types of solution and technical service providers. The Company expects to face further competition from new market entrants and possible alliances among competitors in the future as the convergence of information processing and telecommunications continues. Many of the Company's current and potential competitors have significantly greater financial, technical, marketing and other resources than the Company. As a result, they may be better able to respond or adapt to new or emerging technologies and changes in client requirements or to devote greater resources to the development, marketing and sales of their services than the Company. There can be no assurance that the Company will be able to compete successfully. In addition, the Company will be faced with numerous competitors, both strategic and financial, in attempting to obtain competitive products. Many actual and potential competitors we believe are part of much larger companies with substantially greater financial, marketing and other resources than the Company, and there can be no assurance that the Company will be able to compete effectively against any of its future competitors.
There are significant potential conflicts of interest.
Our personnel will be required to commit substantial time to our affairs and, accordingly, these individual(s) (particularly Cahill. Donahue, and Folsom) may have conflicts of interest in allocating management time among various business activities. In the course of other business activities, certain key personnel (particularly our president and chief executive officer) may become aware of business opportunities which may be appropriate for presentation to us, as well as other entities with which they are affiliated. As such, there may be conflicts of interest in determining to which entity a particular business opportunity should be presented.
The Company has policies in place regarding the manner in which management will resolve these types of conflicts of interest. These policies relate how to deal with conflicts of interest as they relate to outside board memberships, outside business interests, outside investments, outside employment and outside business relationships. In general, the personnel should disclose these conflicts to management or other board members. The decisions as relates to the conflict should be made by the disinterested board of directors. Specifically our code of ethics addresses these conflicts in more detail.
We cannot provide assurances that our efforts and policies to eliminate the potential impact of conflicts of interest will be effective.
Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
|
·
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
|
·
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and/or directors of the Company; and
|
|
·
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.
|
Our internal controls may be inadequate or ineffective, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision.
Currently, the Company is not be required to provide an assessment of the effectiveness of our internal controls over financial reporting until our second annual report after our initial public offering and that an auditor attestation of management's evaluation of effectiveness of the internal controls is not required as long as we are an emerging growth company and/or a smaller reporting company.
The costs of being a public company could result in us being unable to continue as a going concern.
As a public company, we will have to comply with numerous financial reporting and legal requirements, including those pertaining to audits, quarterly reporting and internal controls. The costs of this compliance could be significant. If our revenues are insufficient, and/or we cannot satisfy many of these costs through the issuance of our shares, we may be unable to satisfy these costs through the normal course of business which would result in our being unable to continue as a going concern.
Having only three directors limits our ability to establish effective independent corporate governance procedures and increases the control of our president and chief executive officer.
We have three directors director who also serves as our president, chief executive officer, and chief financial officer. Accordingly, we cannot establish board committees comprised of independent members to oversee functions like compensation or audit issues.
Until we have a larger board of directors that would include some independent members, if ever, there will be limited oversight of our president and chief financial officer’s decisions and activities and little ability for minority shareholders to challenge or reverse those activities and decisions, even if they are not in the best interests of minority shareholders.
Our business venture is subject to a high risk of failure.
Our business relies on a platform that manages health records is at a very early stage and is subject to a high risk of failure. In order to establish commercial viability, we will have to acquire a large customer base. There can be no assurances that we will be able to do so.
We are uncertain of our ability to protect the information.
We rely on trade secrets, know-how and continuing knowledge to achieve and thereafter maintain a competitive advantage with respect to our platform that manages health records. Although we have entered into and we intend to enter into confidentiality and invention agreements with employees, consultants, certain potential customers and advisors, no assurance can be given that such agreements will be honored or that we will be able to effectively protect our rights to our unpatented trade secrets and know-how. Moreover, no assurance can be given that others will not independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets and know-how.
Our failure to develop our limited marketing capabilities would have a material adverse effect on our business.
We have limited marketing capabilities and resources to expend on marketing our platform that manages health records. In order to achieve market penetration we will have to undertake significant efforts and expenditures to create awareness of, and demand for, our health records platform and ancillary products. Our ability to penetrate the market and build our customer base will be substantially dependent on our marketing efforts. No assurance can be given that we will succeed. Our failure to successfully develop our marketing capabilities, both internally and through third-party joint ventures, would have a material adverse effect on our business, operating results and financial condition.
Risks Related to Our Common Stock
Because we have nominal assets and no revenue, we are considered a "shell company" and will be subject to more stringent reporting requirements.
The Securities and Exchange Commission ("SEC") adopted Rule 405 of the Securities Act and Exchange Act Rule 12b-2 which defines a shell company as a registrant that has no or nominal operations, and either (a) no or nominal assets; (b) assets consisting solely of cash and cash equivalents; or (c) assets consisting of any amount of cash and cash equivalents and nominal other assets. Our balance sheet reflects that we have no cash or any other tangible asset and, therefore, we are defined as a shell company. The new rules prohibit shell companies from using a Form S-8 to register securities pursuant to employee compensation plans. However, the new rules do not prevent us from registering securities pursuant to S-1 registration statements. Additionally, the new rule regarding Form 8-K requires shell companies to provide more detailed disclosure upon completion of a transaction that causes it to cease being a shell company. If an acquisition is undertaken (of which we have no current intention of doing), we must file a current report on Form 8-K containing the information required pursuant to Regulation S-K within four business days following completion of the transaction together with financial information of the acquired entity. In order to assist the SEC in the identification of shell companies, we are also required to check a box on Form 10-Q and Form 10-K indicating that we are a shell company. To the extent that we are required to comply with additional disclosure because we are a shell company, we may be delayed in executing any mergers or acquiring other assets that would cause us to cease being a shell company. The SEC adopted a new Rule 144 effective February 15, 2008, which makes resales of restricted securities by shareholders of a shell company more difficult. Resales of our securities are not permitted under Rule 144(i) until 12 months after we are no longer considered a shell company.
Shareholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through issuance of additional shares of our common stock.
We have no committed source of future financing. Wherever possible, our board of directors will attempt to use non-cash consideration to satisfy obligations. In many instances, we believe that the non-cash consideration will consist of restricted shares of our common stock. Our board of directors has authority, without action or vote of the shareholders, to issue all or part of the authorized (500,000,000) shares but unissued (346,127,000) shares. In addition, if a trading market develops for our common stock, we may attempt to raise capital by selling shares of our common stock, possibly at a discount to market. These actions will result in dilution of the ownership interests of existing shareholders, further dilute common stock book value, and that dilution may be material.
The interests of shareholders may be hurt because we can issue shares of our common stock to individuals or entities that support existing management with such issuances serving to enhance existing management’s ability to maintain control of our company.
Our board of directors has authority, without action or vote of the shareholders, to issue all or part of the authorized but unissued common shares. Such issuances may be issued to parties or entities committed to supporting existing management and the interests of existing management which may not be the same as the interests of other shareholders. Our ability to issue shares without shareholder approval serves to enhance existing management’s ability to maintain control of our company.
If we were designated a shell your ability to resell your shares would be limited.
All of the presently outstanding shares of our common stock may only be sold pursuant to an effective registration statement or an exemption from registration, if available. The SEC has adopted final rules amending Rule 144 which have become effective on August 15, 2008. Pursuant to the new Rule 144, one year must elapse from the time a “shell company,” as defined in Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act, ceases to be a “shell company” and files a Form 8-K addressing Item 5.06 with such information as may be required in a Form 10 Registration Statement with the SEC, before a restricted shareholder can resell their holdings in reliance on Rule 144. The Form 10 information or disclosure is equivalent to the information that a company would be required to file if it were registering a class of securities on Form 10 under the Exchange Act. Under amended Rule 144, restricted or unrestricted securities that were initially issued by a reporting or non-reporting shell company or a company that was at anytime previously a reporting or non-reporting shell company, can only be resold in reliance on Rule 144 if the following conditions are met:
|
1)
|
the issuer of the securities that was formerly a reporting or non-reporting shell company has ceased to be a shell company;
|
|
2)
|
the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
|
|
3)
|
the issuer of the securities has filed all reports and material required to be filed under Section 13 or 15(d) of the Exchange Act, as applicable, during the preceding twelve months (or shorter period that the Issuer was required to file such reports and materials), other than Form 8-K reports; and
|
|
4)
|
at least one year has elapsed from the time the issuer filed the current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.
|
At the present time, we are classified as a “shell company” under Rule 405 of the Securities Act Rule 12b-2 of the Exchange Act. To the extent the Company is designated a shell, you would be unable to sell your shares under Rule 144.
Any market that develops in shares of our common stock will be subject to the penny stock regulations and restrictions pertaining to low priced stocks that will create a lack of liquidity and make trading difficult or impossible.
The trading of our securities, if any, will be in the over-the-counter market which is commonly referred to as the OTCQB/OTCBB as maintained by FINRA. As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations as to the price of our securities.
Rule 3a51-1 of the Exchange Act establishes the definition of a "penny stock," for purposes relevant to us, as any equity security that has a minimum bid price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to a limited number of exceptions which are not available to us. It is likely that our shares will be considered to be penny stocks for the immediately foreseeable future. This classification severely and adversely affects any market liquidity for our common stock.
For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person's account for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person's account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and that that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth:
|
·
|
the basis on which the broker or dealer made the suitability determination, and
|
|
·
|
that the broker or dealer received a signed, written agreement from the investor prior to the transaction.
|
Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading and commission payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Additionally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.
Because of these regulations, broker-dealers may not wish to engage in the above-referenced necessary paperwork and disclosures and/or may encounter difficulties in their attempt to sell shares of our common stock, which may affect the ability of selling shareholders or other holders to sell their shares in any secondary market and have the effect of reducing the level of trading activity in any secondary market. These additional sales practice and disclosure requirements could impede the sale of our securities, if and when our securities become publicly traded. In addition, the liquidity for our securities may decrease, with a corresponding decrease in the price of our securities. Our shares, in all probability, will be subject to such penny stock rules for the foreseeable future and our shareholders will, in all likelihood, find it difficult to sell their securities.
The market for penny stocks has experienced numerous frauds and abuses that could adversely impact investors in our stock.
Company management believes that the market for penny stocks has suffered from patterns of fraud and abuse. Such patterns include:
|
·
|
Control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;
|
|
·
|
Manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;
|
|
·
|
"Boiler room" practices involving high pressure sales tactics and unrealistic price projections by sales persons;
|
|
·
|
Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and
|
|
·
|
Wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.
|
The ability of chairman to control our business may limit or eliminate minority shareholders’ ability to influence corporate affairs.
Our Chairman and CEO, Mr. Cahill will beneficially own an aggregate of 70.18% of our outstanding common stock. Because of his beneficial stock ownership, Mr. Cahill will be in a position to continue to elect our board of directors, decide all matters requiring stockholder approval and determine our policies. The interests of Mr. Cahill may differ from the interests of other shareholders with respect to the issuance of shares, business transactions with or sales to other companies, selection of officers and directors and other business decisions. The minority shareholders would have no way of overriding decisions made by Mr. Cahill. This level of control may also have an adverse impact on the market value of our shares because Mr. Cahill may institute or undertake transactions, policies or programs that may result in losses, may not take any steps to increase our visibility in the financial community and
/
or may sell sufficient numbers of shares to significantly decrease our price per share.
We do not expect to pay cash dividends in the foreseeable future.
We have never paid cash dividends on our common stock. We do not expect to pay cash dividends on our common stock at any time in the foreseeable future. The future payment of dividends directly depends upon our future earnings, capital requirements, financial requirements and other factors that our board of directors will consider. Since we do not anticipate paying cash dividends on our common stock, return on your investment, if any, will depend solely on an increase, if any, in the market value of our common stock.
Because we are not subject to compliance with rules requiring the adoption of certain corporate governance measures, our stockholders have limited protection against interested director transactions, conflicts of interest and similar matters.
The Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the SEC, the New York and American Stock Exchanges and the Nasdaq Stock Market, as a result of Sarbanes-Oxley, require the implementation of various measures relating to corporate governance. These measures are designed to enhance the integrity of corporate management and the securities markets and apply to securities that are listed on those exchanges or the Nasdaq Stock Market. Because we are not presently required to comply with many of the corporate governance provisions and because we chose to avoid incurring the substantial additional costs associated with such compliance any sooner than legally required, we have not yet adopted these measures.
Because none of our directors (currently three persons) are independent directors, we do not currently have independent audit or compensation committees. As a result, these directors have the ability, among other things, to determine their own level of compensation. Until we comply with such corporate governance measures, regardless of whether such compliance is required, the absence of such standards of corporate governance may leave our stockholders without protections against interested director transactions, conflicts of interest, if any, and similar matters and investors may be reluctant to provide us with funds necessary to expand our operations.
We intend to comply with all corporate governance measures relating to director independence as and when required. However, we may find it very difficult or be unable to attract and retain qualified officers, directors and members of board committees required to provide for our effective management as a result of Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has resulted in a series of rules and regulations by the SEC that increase responsibilities and liabilities of directors and executive officers. The perceived increased personal risk associated with these recent changes may make it more costly or deter qualified individuals from accepting these roles.
You may have limited access to information regarding our business because our obligations to file periodic reports with the SEC could be automatically suspended under certain circumstances.
We are subject to certain informational requirements of the Exchange Act, as amended and we will be required to file periodic reports (i.e., annual, quarterly and material events) with the SEC which will be immediately available to the public for inspection and copying. These reporting obligations may be automatically suspended under Section 15(d) of the Exchange Act if we have less than 300 shareholders and do not file a registration statement on Form 8-A (of which we have no current plans to file). If this occurs after the year in which our registration statement becomes effective, we will no longer be obligated to file such periodic reports with the SEC and access to our business information would then be even more restricted. We are required to deliver periodic reports to security holders as proscribed by the Exchange Act, as amended. However, we will not be required to furnish proxy statements to security holders and our directors, officers and principal beneficial owners will not be required to report their beneficial ownership of securities to the SEC pursuant to Section 16 of the Exchange Act until we have both 500 or more security holders and greater than $10 million in assets. This means that access to information regarding our business and operations will be limited. However, we plan to voluntarily continue reporting in the absence of an SEC reporting obligation.
We are an emerging growth company within the meaning of the Securities Act, and as a consequence of taking advantage of certain exemptions from reporting requirements that are available to emerging growth companies, our financial statements may not be comparable to companies that comply with public company effective dates.
We are an emerging growth company as defined in Section 2(a)(19) of the Securities Act of 1933, as amended (the “Securities Act”). Pursuant to Section 107 of the Jumpstart Our Business Startups Act, we may take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards, meaning that we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have chosen to take advantage of the extended transition period for complying with new or revised accounting standards applicable to public companies to delay adoption of such standards until such standards are made applicable to private companies. Accordingly, our financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards.
For all of the foregoing reasons and others set forth herein, an investment in our securities in any market that may develop in the future involves a high degree of risk.