UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
(Mark One)
X ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
-- EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2004
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period to
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Commission file number 333-102289
UNIVERSAL HEALTHCARE MANAGEMENT SYSTEMS, INC.
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(Name of small business issuer in its charter)
Florida 01-0626963
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
14614 S.W. 174 Terrace Miami, FL 33177
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(Address of principal executive offices) (Zip Code)
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on which registered
None N/A
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Securities registered under Section 12(g) of the Exchange Act:
Common stock, par value $ .001
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(Title of class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
-- --
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of the registrant's knowledge in definitive proxy or information incorporated by reference in Part III of this Form or any amendment to this Form 10-KSB. N/A
State issuer's revenues for its most recent fiscal year. Nil
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State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which common equity
was sold, or average bid and asked price of such common equity, as of a
specified date within the past 60 days.
The aggregate market value of non-affiliates as of December 31, 2004 is
$2,731,938.
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
There is a total of 4,517,667 common shares outstanding as of December 31,
2004.
Transitional Small Business Disclosure Format (Check one): Yes No X
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2.
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TABLE OF CONTENTS
FORM 10-KSB ANNUAL REPORT
FISCAL YEAR ENDED DECEMBER 31, 2004
<TABLE>
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ITEM PAGE
<S> <C>
Part I
1. Description of Business 4
2. Description of Property 27
3. Legal Proceedings 28
4. Submission of Matters to a Vote of Security Holders 28
Part II
5. Market for Common Equity and Related Stockholders
Matters 28
6. Management's Discussion and Analysis of Operations 28
7. Financial Statements with Footnotes 29
8. Changes and Disagreements with Accountants on
Accounting And Financial Disclosures 41
8A. Controls and Procedures 41
Part III
9. Directors, Executive Officers, Promoters and
Control Persons, Compliance with Section 16(a)
of the Exchange Act 41
10. Executive Compensation 45
11. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters 46
13. Exhibits and Reports on Form 8-K 47
14. Principal Accountant Fees & Services 48
Signatures 48
Exhibits
31.1 Certifications 50
32.1 Certifications 51
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PART I
Item 1. Description of Business
Universal Healthcare Management Systems, Inc. (the "company") was organized
under the laws of the State of Florida on December 26, 2001. Before this company
came into existence, a predecessor company had been incorporated under the name
of Oncology Care and Wellness Center, Inc. ("Oncology") on September 24, 2001
receiving monies from lenders in order to develop its prime business objectives.
In May 2002, Oncology discontinued its operations and all of the assets
were acquired by the company. All of Oncology's original lenders converted their
debt into equity in the Company. The operations of the predecessor company have
been included in the consolidated financial statements.
Oncology Care and Wellness Inc. has transferred its assets to Universal.
Universal became the parent company. The shareholders of Oncology agreed to
accept stock in Universal in exchange for the monies advanced to Oncology.
Therefore any monies advanced to Oncology by investors were treated in the form
of a loan. All liabilities in Oncology were paid prior to commencement of
operations of Universal. There was no consideration paid to Oncology or its
shareholders when in reality there were no shareholders other than Mr. Hankin.
Mr. Hankin received stock in exchange for his interest in Oncology. As a
result Oncology became a wholly owned subsidiary of Universal as stated in the
notes to financial statements. Oncology received approximately $650,000 from
various individuals; which monies, as indicated above, were treated as a loan.
These loans were exchanged for stock in Universal. The monies received by
Universal from Oncology were treated as an inter-company loan to effect the
stock exchange. Therefore the end result is that the investors own stock in
Universal only.
Oncology Care and Wellness Center, Inc. was our original name. Shortly
after using that name, it was decided that the name did not depict us
accurately, and that we needed to use a different name, that of Universal
Healthcare Management Systems, Inc. ("Universal"). All that was actually done
was to change to using the name of Universal Healthcare Management Systems, Inc.
It is intended for Universal to become the parent company owning medical
subsidiaries. Universal will not perform any medical therapy. The name of
Oncology Care and Wellness Center ("Oncology") will be used for the branch
performing the cancer treatments. Because we are keeping them as two separate
corporations, we could not just file a name change, but for all intensive
purposes, you can consider them to be one and the same company operating with
two different names. Oncology is a wholly owned subsidiary of Universal.
At this time Oncology has no operations. Initially, Oncology received
monies in the form of loans from various investors. Such loans were converted
into stock of Universal. Any monies remaining in Oncology were transferred to
Universal.
The only entities that potentially could be considered as subsidiaries are
Oncology Care and Wellness Center, and another company known as Universal
Development and Holdings Corporation. Neither of these companies are functional
nor do they have any assets, liabilities or cash flow. In a more literal sense
the corporations are just shells. They have been formed so that we have the
legal use of the name in the future. Eventually, as we develop, both companies
will be used. Their stock is owned 100% by Universal Healthcare Management
Systems. There are no contracts or agreements as of this date. Our major
subsidiaries will be medical facilities that we are able to obtain as
acquisitions.
NARRATIVE INTRODUCTION
Typical business plans are tedious, operational documents containing an
executive summary, growth and marketing stratagems, competitive analyses,
strategic alliances, financials and so on, letting everyone know why they should
invest in that particular company. They are so uniform in style that software
templates are available that structurally design them. Unfortunately, most
readers fail to go beyond the executive summary because of sheer boredom; and
the need for the business, its strategies and financial statements are usually
inflated. Because of the complexities involved in cancer therapy, this Business
Plan has been written in a narrative form instead of the conventional format to
enable any person to understand it thoroughly. Even if the reader is not
concerned with investing, the Business Plan is informative reading providing a
first-rate understanding of cancer therapy in modern day America and should be
read by everybody as it is a disease that sooner or later affects the lives of
nearly everyone.
4.
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Dr. Harold J. Burstein of the Department of Medical Oncology at Dana-Farber
Cancer Institute in Boston, MA wrote, "It is almost an impossible task to
summarize the advances in cancer during the past century. The field of oncology
did not exist beforehand, and cancer was a much less common ailment. Therapy --
to the extent that there was any -- began and ended with surgery. Cancer
treatment has matured alongside remarkable advances in surgery, anesthesia,
radiology, pathology, and radiation therapy. The rapid evolution of internal
medicine has also facilitated progress in cancer medicine. Without the advent of
blood banking and the progress within infectious diseases, the current practice
of cancer medicine would be unthinkable." Lung, prostate, breast, and colorectal
cancer account for about 56% of all cancer cases and are also the leading causes
of cancer deaths for every racial and ethnic group.
Smoking, poor lifestyle choices, lack of exercise, bad nutrition and
pollution have raised havoc with the human body. We have over-planted our soils,
contaminated them with toxic fungicides, herbicides and pesticides, and leached
the necessary chemicals and nutrients from the very grounds that grow our food.
We no longer get the nutrition from fruits and vegetables that we got prior to
the twentieth century and the animals that we eat graze on the same type of
toxic infertile land or are given food supplements, antibiotics and chemical
injections. Severe water pollution has caused much of our seafood to contain too
many toxins to be safely consumed; for example, many lobsters just off the coast
of Rhode Island are not edible because they have cancer! Did you know that
throughout the world around 3 million people die annually due to drinking impure
water?
According to the U.S. Environmental Protection Agency, in the United States
alone we use 1.2 billion pounds of chemicals on our fruits and vegetables yearly
or about 5 pounds for every man, woman and child. Organically grown produce is
more nutritional and healthier than non-organic, but because of the abundant use
of manure for fertilization, it introduces excessive amounts of bacteria into
the plants, which has consequently caused some deaths. The Food and Drug
Administration (FDA) has approved more than 1,200 food additives, most of which
are chemicals with names that most people can't even pronounce. In the late
1970s the Department of Agriculture stopped meat processors from using
"polysorbate 80" in corned beef because it was carcinogenic, yet it is still
used in some baked goods. Why? The point is, we are ingesting a lot of dangerous
products for the sake of the almighty dollar and our bodies and health are
paying the dire consequences. You are what you eat, and cancer develops when
one's immune system is not capable of destroying the free radicals in our body
at the same rate that they are produced.
Research in cancer labs has been the pillar upon which modern biomedical
science rose by revolutionizing immunology, cell biology, genetics, and
molecular biology. Cancer has become so common that there is hardly a family
that hasn't been afflicted by it. Certain cancers such as childhood leukemia and
advanced testicular cancers at one time were strictly fatal, but modern medicine
has been able to extend the lifespan of a majority of these patients. On the
other hand, there are those cancers where progress is practically nonexistent.
Multi-agent chemotherapy is still the norm for treating "non-solid" tumors,
that is, the leukemias and lymphomas, and also for unusual cancers such as germ
cell tumors or childhood sarcomas, but this has been only partially successful.
Radiation therapy, hormonal therapy, chemotherapy, and surgery, or combinations
thereof, appear to be the standard for treating "solid" tumors such as colon,
breast, lung and prostate cancer, and with a fair degree of success.
Mankind doesn't realize that he is his own worst enemy, and until he is
willing to make major changes in his lifestyles, the incidence of cancer will
continue to increase, soon replacing cardiovascular diseases as the leading
cause of death. Smoking, poor eating habits and lack of moderate exercise are
perhaps more responsible for the growth of cancer than environmental conditions.
Our primary goal as a medical center is to seek the eradication or remission of
cancer by treating the tumor and the body as a whole, and to teach our patients
the importance of a healthy lifestyle with the hopes of not treating anyone a
second time. To achieve this goal, we realize that we must combine the best of
mainstream medicine with the best of modern progressive integrative medicine.
We hope to be instrumental in establishing the millennium's standards for
the medical profession by instituting effective medical preventative care and
maintenance, by caring for the body as a whole, and by treating both the disease
and its cause; thus eliminating it, instead of camouflaging its symptoms.
Universal Healthcare Management Systems, Inc. ("the Company") started with a
group of investors, the vast majority of which are physicians, who wanted to
make a difference in the care and treatment of patients with cancer. More than
100 shareholders have invested more than one and a half million dollars thus far
for working capital.
The section titled "Therapeutic, Diagnostic and Screening Equipment"
contains a brief explanation of the medical jargon used herein for readers that
may be unfamiliar with the terminology. The sections titled "Satellite Medical
Centers" and "Primary Medical Centers" give a detailed explanation of what is
meant by the use of the terms Satellite and Primary.
5.
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EXECUTIVE SUMMARY
Most of us know someone that has been affected by cancer, which if left
untreated, can easily become a deadly disease. According to the American Cancer
Society's publication, Cancer Facts & Figures 2002, it is the second leading
cause of death in the United States, only surpassed by cardiovascular disease,
claiming the lives of 1 in 4 deaths, with 555,500 people dying in 2002 from
cancer. The effects of cancer on families can be devastating, spiritually and
financially. Our primary goals are to diagnose and treat patients with a very
caring and comprehensive therapeutic phase and long-term maintenance phase
providing unparalleled patient services. Oncology Care and Wellness Center,
Inc., a wholly owned subsidiary of Universal Healthcare Management Systems,
Inc., is the branch through which we will staff our facilities with
knowledgeable and caring experts utilizing the most modern imaging and radiation
equipment available.
The mission of Universal Healthcare Management Systems, Inc. is to develop
a nationwide network of comprehensive oncology care and wellness centers that
provide communities with state-of-the-art therapeutic, diagnostic and screening
capabilities coupled with preventive care and maintenance programs that treat
the body as a whole, not just the disease. Growth, success and stability of the
organization will be assured by experienced and innovative leadership and
management. Universal Healthcare Management Systems will provide excellence of
medical care, attention to technical detail, and dedication to comforting
oncology patients, by helping to alleviate the pain, suffering and death caused
by cancer and other debilitating diseases.
Our goal is to consolidate oncological treatment services such as
radiation, chemotherapy, brachytherapy and hormonal therapy into a cost
effective, practical and efficient system, providing patients with effective
integrative medicine, by combining the best of mainstream and alternative
medicine into a national network of Oncology Care and Wellness Centers, which
when fully operational will include state-of-the-art comprehensive screening,
diagnostics, therapy, and preventative maintenance, treating not just the
disease, but the body as a whole.
This novel concept should allow the physicians involved to better diagnose
and treat patients, and to follow and document their therapy and response to
treatment. The number of people over 65 is expected to double to 80 million by
2050, according to the U.S. Census Bureau. The journal Cancer and Holly W. Howe,
Ph.D., executive director of the North American Association of Central Cancer
Registries stated that we can expect the incidence of cancer doubling by the
year 2050 with 2.6 million people being diagnosed annually with cancer, which
relates to more than a million deaths per year from cancer alone, making cancer
the leading cause of death. This represents an increase of approximately 20% per
year.
Cancer Statistics:
Martin Brown, a National Cancer Institute researcher who studies the
economic burden of cancer, has estimated that treatment of the disease and other
expenses were nearly $157 billion in 2001. "Whether that figure will rise in
step with the doubled caseload isn't clear," says Brown, who is now helping
perform such an analysis. According to Brown cancer is on average about 50
percent more expensive to treat than other diseases. It now consumes about 5 to
10 percent of the overall health-care budget. However, cancer care accounts for
20 percent of the annual budget for Medicare, the government's insurance program
for the elderly. "We suspect that it's going to become an increasing proportion"
in the future, Brown says.
Cancer statistics could best be summarized from the book Beating Cancer
With Nutrition by Patrick Quillin PhD, RD, CNS, and Noreen Quillin:
o "Each year over 1.3 million more Americans are newly diagnosed with
cancers."
o "Over 2.5 million Americans are currently being treated for cancer."
o "For the past four decades, both the incidence and age-adjusted death
rate from cancer in America has been steadily climbing."
o "Annually in America, there are more than 50 million cancer-related
visits to the doctor; one million cancer operations and 750,000 radiation
treatments."
o "As of 1998, experts estimate that 45% of males and 39% of females living
in America will develop cancer in their lifetime." o "Breast cancer has
increased from one out of 20 women in the year 1950 to one out of 8 women in
1995." o "With some cancers, notably liver, lung, pancreas, bone, and advanced
breast cancer, our five year survival rate from traditional therapy alone is
virtually the same as it was 30 years ago."
o "In 1992, there were 547,000 deaths in America from cancer, which is
1,500 people per day, which is the equivalent of 5 loaded 747 airplanes killing
all occupants on board."
o "American health care is nearing a financial 'meltdown.' "
o "We spent $1.2 trillion in 1997 on disease maintenance - twice the
expense per capita of any other health care system on earth. Notice that I said
'disease maintenance,' because we certainly do not support health care in
America."
Data available from the U.S. Health Care Financing Administration show that
total health care expenditures in the United States now exceed $1 trillion
annually, representing a tenfold increase since the 1970s. Current expenditures
are equivalent to 14% of the gross domestic product, and one half of these
health care expenditures are for individuals age 65 and over.
6.
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We are Living Longer:
Cancer is often considered a disease of the elderly. As the population
ages, it's simply a matter of living long enough for the disease process to
develop. For example, cancer of the prostate is a major cause of death in men
sixty and older. An examination of the prostatic tissue of several deceased
elderly men that died from causes other than prostatic cancer would show that
more than 80% of the men developed the initial cellular changes that would
ultimately become active prostatic cancer. Statistically, given the opportunity
to live longer, the disease process will most likely manifest itself clinically.
Diagnostic Techniques Continuously Improve:
Diagnostic radiology, in conjunction with certain improved laboratory
tests, has improved our ability to diagnose cancers of most types. With the
advent of Computerized Axial Tomography (CAT) scans in the seventies, to the
availability of Magnetic Resonance Imaging (MRI) in the past decade, our efforts
towards early detection have been greatly enhanced. More recently, Positron
Emission Tomography (PET) scans have been introduced, though not as widely
utilized in smaller communities as CAT and MRI scans. As equipment costs
decrease, the prevalence of these sophisticated diagnostic tools should increase
in the smaller communities.
Certain laboratory tests such as the Carcinoembryonic Antigen (CEA) for
colon cancer (a protein that is released into the blood by some cancer cells in
some, but not all people - sometimes other cells may release it, and in some
patients CEA is never present at levels that can be detected) and the Prostate
Specific Antigen (PSA) for prostate cancer (a protein that is mainly produced in
the prostate and under normal circumstances is hardly detectable in the blood
circulation, but can have the levels elevated) have made an enormous impact on
the early detection of cancer, while other procedures have profoundly affected
the diagnosis of breast cancer. New procedures are always being developed, and
fortunately most of these diagnostic tests do not require as large a capital
commitment as does the therapeutic and imaging equipment, and thus can be
utilized in most communities regardless of size.
Strategy:
The typical free-standing (not attached as part of a hospital) radiation
therapy medical center costs $3 to $4 million including the land, building and
all new state-of-the-art equipment, and requires 10 to 15 patients to be treated
on a daily basis in order to breakeven, depending upon the modality of therapy.
Because of this rather large, but necessary capital expenditure, there are
hardly any free-standing or attached cancer facilities in communities with a
population under 75,000 people.
Conceptually, the Company should be able to bring cancer therapy to any
size community through the combination of a Primary medical center with several
Satellite medical centers. Depending upon the demographics, a typical cluster of
medical centers would cover around 500 to 1,200 square miles with a population
ranging from 1 to 3 million people. This would warrant a Primary center having 3
or more affiliated Satellite centers, or a cancer therapy medical center for
each 50,000 to 100,000 of population. Several other factors govern the choice of
location such as the average age of people within a 10 to 15 mile radius of a
center, local competition, the requirement or lack thereof for a Certificate of
Need (CON) license, and the ability to obtain proper medical staff in that area.
The purpose for establishing clusters of medical centers is to bring cancer
therapy to communities having no facilities, while creating cost efficiencies by
eliminating duplication of procedures and consolidations of certain functions
that should allow the Company to offer services that are dreadfully needed, yet
very rarely exist. Although our goal is to procure most Satellite centers by
acquisition, there may be the need to build in areas where nothing exists or is
available. Newly built Satellite centers should cost approximately $3 million
and should cost less to operate than our competitors. Since each patient needs
CT scanning and simulation to determine the treatment planning to eradicate the
tumor, our competition must spend about $700,000 for that equipment. We, on the
other hand, would only need one CT simulator at each Primary center. Considering
the initial cost of the equipment, the cost of building a room to house the
scanner, and interest payments over a 5-year period, the Company should save
close to a million dollars per center, not including the annual cost of a
technician to operate the scanner or other associated costs.
Medical centers pay 4% to 9% to billing companies to handle all of their
medical billing electronically, which can easily cost a center over $100,000
annually. Those that do their own billing internally spend at least $50,000 in
salary, plus benefits and other expenses. Initially, all patients should go to a
Primary center for a CAT scan and for their billing information to be set up in
the computer. This should eliminate the duplication of expensive billing, and
should be further simplified by having all Primary centers forward their billing
to the Corporate Medical Center.
7.
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There are several other duplications that should be eliminated in the
construction phase and operational parameters of the Satellite centers. For
instance, a treatment planning system costs several hundred thousand dollars,
but only one is necessary at each Primary center. This enhancement of efficiency
should provide a much higher profit structure, which should provide the funds
necessary to afford each patient with a quality of unsurpassed medical care.
Furthermore, the necessity to treat 10 to 15 patients on a daily basis in order
to breakeven may be reduced. Medicare and managed care providers such as
insurance companies rarely pay for skilled counselors to provide "mental
therapy" for comforting the patient, family and friends, and teaching them how
to cope with such a debilitating disease including the possibility of death; nor
do they provide for physical therapy and pain relief, or nutritionists; and
least of all will they help the patient secure a wig if necessary. This is as
much a part of the therapeutic and healing process as is the radiation or
chemotherapy, and to the best of Management's knowledge, Universal Healthcare
Management System's subsidiaries should be the only cancer centers to provide
these benefits to its patients.
The Primary centers of each cluster need to be strategically located in
order to be somewhat equidistant from their Satellite centers, while at the same
time being centrally located in the highest population density. Each Primary
center should have two linear accelerators and one brachytherapy unit for cancer
treatment, and may have a medical oncologist to administer chemotherapy when
necessary. Additionally, Primary centers will have full diagnostic and screening
abilities, and sufficient office space to handle the books and records of its
Satellite centers. Cancer treatment by brachytherapy requires an average of 4
visits to a medical center, whereas treatment by a linear accelerator requires
visits 5 days a week for 4 to 8 weeks depending upon the malignancy. Therefore,
Satellite centers only need one linear accelerator, but should be designed to
include a second vault to house another linear accelerator should an increase in
patient load require another linear accelerator or in-house brachytherapy.
Should the accelerator at a Satellite center become nonoperational for a few
days, the patients of that Satellite center can be temporarily transferred to
the Primary center to maintain continuity of therapy.
The Company's goal is to develop approximately 3 Primary centers per year,
which would necessitate the acquisition or building of 9 or more Satellite
centers annually. Managed care providers such as HMO insurance companies have
restricted the time a physician can spend with a patient from 10 to 15 minutes.
How does one explain all the nuances of cancer therapy to a frightened person in
less than 15 minutes? Insurance providers have degraded the medical profession
inadvertently by making the bottom line appear more important than the lives of
the patients, and have literally restricted the physician's ability to perform
due diligence. Nevertheless, these necessities of the healing process should be
provided regardless of reimbursement protocol. Since the Primary centers should
be a short driving distance from their Satellite centers, and consequently, the
patient's home, services such as mental therapy, pain relief, physical therapy,
nutritional counseling, wig selection, as well as maintenance programs for
optimal health after treatment is finished, should all be conducted at the
Primary center.
Mainstream medicine aggressively attacks the symptoms of cancer, but fails
to address its cause. Herein lies one of the major differences between the
Company and typical cancer therapy in modern day America. Treating the symptoms
of cancer is the beginning and the end for our competition, but for the Company,
it is only the beginning. Preventive care and maintenance, and healing programs
that treat the body as a whole, not just the disease will be instituted in all
Primary medical centers. Unless instructed otherwise by a referring physician,
patients should initially be evaluated by our highly trained and skilled
integrative Primary care physicians, who need to design a specialized
therapeutic program combining the most effective treatments of mainstream
state-of-the-art therapy with those of the best of alternative medicine,
attacking the cause and the symptoms of cancer.
For thousands of years, every type of scientist studied the parameters,
fundamentals and consequences associated with "cause and effect." For some
unknown reason modern medicine is ignoring this basic scientific protocol by
treating only the symptoms or manifestation of disease, instead of attacking its
root source. It's really simple logic - get rid of the cause and there won't be
any symptoms to treat! Cancer exists because at some point the body malfunctions
and is unable to rid itself of the free radicals that cause cells to mutate.
Even though our patients should receive the most modern and sophisticated
therapeutic care available to treat the cancer, it is not enough. The body must
also be treated as a whole entity, restoring its immune system with the
abilities that it had to fight disease before cancer got the upper hand. When
the body can actively and effectively participate in the struggle, along with
the marvels of modern medicine, then the patient should be able to win the
battle against cancer.
8.
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THERAPEUTIC, DIAGNOSTIC AND SCREENING EQUIPMENT
Brief History of Radiation Therapy:
The first cancer patient was treated less than one month after German
physicist Wilhelm Conrad Roentgen discovered x-rays in Chicago in January 1896.
Adequate exposure to high-energy x-rays (4-20 million electron volts or MeV)
will kill tumors. Photons at these energies interact with the molecules in human
tissue (mostly with water) to create highly energized ions, that is, negatively,
charged atoms, which are harmful to all living cells. Provided the damage is not
excessive, healthy cells possess the capacity to recover, whereas tumor cells
lack that ability. Therefore, repeated exposure to high-energy x-rays, or in
some cases, energized electrons, will impair or kill them. Radiation oncologists
need a reliable source of suitable high-energy x-rays that can systematically be
concentrated on tumor cells, while sparing the surrounding healthy cells as much
as possible. The x-ray tubes used to generate x-rays for diagnostic purposes
cannot do this because their energy levels are too low.
Particle physicists developed the first linear accelerators (linacs) in the
1950s. Technology has shrunk them from mammoth pieces of equipment to machines
that now fit comfortably in a 400 square foot room. However, they must be
located within specially constructed concrete and lead treatment rooms known as
vaults in order to provide adequate x-ray shielding and can have walls up to 8
feet thick. Most medical linacs produce x-ray radiation because of the
acceleration of electrons, which are taken from the surface of a heated strip of
metal and are thrust through a vacuum chamber by the electromagnetic field of
microwaves and accelerated to nearly the speed of light, an action that greatly
boosts their energy levels. After crossing a short distance of about one yard,
these energized electrons bombard a tungsten target, causing it to emit photons
(x-rays) at energies that can exceed 20 MeV.
For many years radiotherapy typically used a beam that was rectangular or
square in shape that was usually directed onto a target from two to four
different angles of approach (the field). The dosage delivered was a uniform
strength across each field of radiation, but the side effects from damage to
healthy tissue surrounding the tumor could be harmful unless the dose was
administered below optimal tumor killing levels. In the 1970s 2-D radiotherapy
techniques began in which blocks and wedges of lead were used to shape beams to
fit a relatively crude two-dimensional profile of the tumor.
The use of 3-dimensional conformal radiation therapy, which is in wide use
today, was developed in the 1980s. Through the use of Computed Tomography scans,
high-resolution three-dimensional images of a tumor are obtained, and brought
into a radiation treatment planning system that performs the calculations to
shape the x-ray beam to the contours of the 3-D image. The beam was shaped
through the use of custom-molded lead alloy blocks and was a cumbersome and
time-consuming operation.
Then, in the 1990s an enormous advance came with the development of the
multi-leaf collimator, a computer-controlled array of 52 to 120 parallel and
individually adjustable tungsten boards or leaves that can shape the path of an
x-ray beam. This allows the radiation oncologist to use precisely shaped beams
from several angles, while delivering a radiation dose that closely matches the
3-D volume of the tumor. Although this treatment technique significantly reduces
the radiation of healthy tissue, a uniform dose is still delivered across the
entire treatment field, which can still damage healthy tissue while not giving
enough of a dose to the tumor. Now that computers are controlling the beam
shape, there is no need to produce lead based blocks or for therapists to enter
the vault once treatment has begun.
Finally, in the late 1990s came the ultimate technological breakthrough in
radiotherapy, the invention of IMRT -- Intensity Modulated Radiation Therapy.
Radiation oncologists can now divide the treatment field covered by each beam
angle into hundreds of segments as small as 2.5 mm by 5 mm. By using the
adjustable leaves of the multi-leaf collimator, a different dose can be
delivered to each segment thereby modulating the dose intensity across the
entire treatment field, which allows more intensity in the most aggressive areas
of the tumor and less in areas where the beam is near healthy tissue.
This sophistication of therapy necessitated the development of new
treatment planning software, known as "inverse treatment planning" software.
Besides having a linear accelerator with a multi-leaf collimator to treat
patients with IMRT, a medical center must have inverse treatment planning
available, CT scanning, simulation devices and software for establishing patient
positioning as well as pre-testing and refining treatment plans, an adjustable
patient couch, a portal imaging quality assurance system of hardware and
software for verifying that the beams are being delivered as planned, and most
importantly a highly skilled staff of radiation oncologists, medical physicists,
dosimetrists and radiation therapists. Today's state-of-the-art IMRT therapy is
more comforting for the patient, does minimal healthy tissue damage, treats the
patient in 15 minutes, gives the ability to handle high patient loads, permits
aggressive therapy, is more successful destroying or controlling the tumor, and
has higher reimbursement rates.
Brachytherapy:
Brachytherapy is derived from ancient Greek words for short distance
(brachy) and treatment (therapy), and is sometimes called "seed" implantation.
This is an outpatient procedure used in the treatment of different kinds of
cancer. Radioactive seeds are carefully placed inside of the cancerous tissue
and positioned in a manner that will attack the cancer most efficiently.
Brachytherapy has now been used for over a century. Some of the diseases now
treated with brachytherapy include: prostate cancer, cervical cancer,
endometrial cancer, and coronary artery disease.
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Brachytherapy, according to the American Brachytherapy Society, has been
proven to be very effective and safe, providing a good alternative to surgical
removal of the prostate, breast, and cervix, while reducing the risk of certain
long-term side effects. In the treatment of prostate cancer, the radioactive
seeds are about the size of a grain of rice, and give off radiation that travels
only a few millimeters to kill nearby cancer cells. With permanent implants (for
example, prostate) the radioactivity of the seeds decays with time while the
actual seeds permanently stay within the treatment area. There are 2 different
kinds of brachytherapy: permanent, when the seeds remain inside of the body, and
temporary, when the seeds are inside of the body and then removed. Diseases
treated with temporary implants include many gynecologic cancers.
Computed Axial Tomography:
Computed Tomography (CT) imaging, also known as CAT scanning (Computed
Axial Tomography), was developed by the British inventor Sir Geoffrey
Hounsfield. It is the process of using computers to generate a three-dimensional
image from flat two-dimensional X-ray pictures, one slice at a time. The X-rays
from the beams are detected after they have passed through the body and their
strength is measured. Beams that have passed through less dense tissue such as
the lungs will be stronger, whereas beams that have passed through denser tissue
such as bone will be weaker. A computer can use this information to work out the
relative density of the tissues examined. Each set of measurements made by the
scanner is, in effect, a cross-section through the body. CT is fast, patient
friendly and has the unique ability to image a combination of soft tissue, bone,
and blood vessels.
The CT scanner was originally designed to take pictures of the brain. Now
it is much more advanced and is used for taking images of virtually any part of
the body. The scanner is particularly good at testing for bleeding in the brain,
for aneurysms (when the wall of an artery swells up), brain tumors and brain
damage. It can also find tumors and abscesses throughout the body and is used to
assess types of lung disease. In addition, the CT scanner is used to look at
internal injuries such as a torn kidney, spleen or liver; or bony injury,
particularly in the spine. CT scanning can also be used to guide biopsies and
therapeutic pain procedures. CT scanning has also proven invaluable in
pinpointing tumors and planning treatment with radiotherapy.
Magnetic Resonance Imaging:
Magnetic Resonance Imaging (MRI or MR) is a fairly new technique that has
been used since the beginning of the 1980s. The MRI scanner uses magnetic and
radio waves, meaning that there is no exposure to X-rays or any other damaging
forms of radiation. The patient lies inside a large, cylinder-shaped magnet.
Radio waves 10,000 - 30,000 times stronger than the magnetic field of the earth
are then sent through the body. This affects the body's atoms, forcing the
nuclei into a different position. As they move back into place they send out
radio waves of their own. The scanner picks up these signals and a computer
turns them into a picture. These images are based on the location and strength
of the incoming signals. Our body consists mainly of water, and water contains
hydrogen atoms. For this reason, the nucleus of the hydrogen atom is often used
to create an MRI scan in the manner described above. Using an MRI scanner, it is
possible to make pictures of almost all the tissue in the body. The tissue that
has the least hydrogen atoms such as bones, turns out dark, while the tissue
that has many hydrogen atoms such as fatty tissue, looks much brighter.
By changing the timing of the radiowave pulses it is possible to gain
information about the different types of tissues that are present. An MRI scan
is also able to provide clear pictures of parts of the body that are surrounded
by bone tissue, so the technique is useful when examining the brain and spinal
cord. Because the MRI scan gives very detailed pictures it is the best technique
when it comes to finding tumors in the brain. If a tumor is present the scan can
also be used to find out if it has spread into nearby brain tissue. With an MRI
scan it is possible to take pictures from almost every angle, whereas a CT scan
only shows pictures horizontally. MRI scans are generally more detailed than a
CT scan. The difference between normal and abnormal tissue is often clearer on
the MRI scan than on the CT scan. There are no known dangers or side effects
connected to an MRI scan since radiation is not used, which means the procedure
can be repeated without problems.
Positron Emission Tomography:
Positron Emission Tomography (PET) is amazing, because it means that
through research, man has predicted the existence of, discovered, and is now
using anti-matter (a positron is the anti-matter equivalent of an electron). A
positron is a positively charged particle with the same mass as an electron.
After being emitted from the nucleus of an atom, it travels for a short distance
- in the case of PET, through surrounding tissue - losing energy as it collides
with other molecules. As the positron comes close to a stop, it combines with an
electron, and the mass of both particles is converted into energy. This is
called an annihilation. The resulting energy is dispersed in the form of two
high-energy gamma rays or photons, traveling outward and in opposite directions
from each other.
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This technology uses the results of theoretical physics, quantum physics,
electronics engineering, computing, manufacturing and medicine to produce a
machine that can map the brains that designed it. PET scans use a small dosage
of a chemical that emits positrons called radionuclide combined with a sugar,
which is injected into the patient. A PET scanner will rotate around the
patient's head to detect the positron emissions given off by the radionuclide.
Because malignant tumors are growing at such a fast rate compared to healthy
tissue, the tumor cells will use up more of the sugar, which has the
radionuclide attached to it. The computer then uses the measurements of glucose
used to produce a picture, which is color-coded. Unlike anatomical imaging
modalities such as CT and MR, PET permits assessment of chemical and
physiological changes related to metabolism. This is important because
functional change often predates structural changes in tissues. PET images may
therefore demonstrate pathological changes long before they would be revealed by
modalities like CT and MR.
Gamma Knife:
In 1968 Professor Lars Leskell of the Karolinska Institute in Stockholm,
Sweden and Professor Borge Larsson of the Gustaf Werner Institute at the
University of Uppsala, Sweden developed the Gamma Knife, an instrument designed
to target deep-seated intracranial structures without the risks of invasive open
skull surgery. The Gamma Knife is used to treat arteriovenous malfunctions and
certain brain tumors without a single incision.
The Gamma Knife uses a concentrated radiation dose from Cobalt-60 sources
to damage abnormal tissue. This exactness is accomplished by 201 beams of
radiation intersecting to form a precise tool. These beams are focused on the
target area and designed to destroy only that which is abnormal. Treatment with
the Gamma Knife is multi-disciplinary, that is, the skills of a neurosurgeon,
radiation oncologist and radiation physicist are brought together to develop a
treatment program tailored to each individual patient. The referring physician
is usually an active collaborator in the treatment process. All follow-up
studies and outcome assessments are done in conjunction with the patient's
physician, depending on the referring physician's interest and participation.
The risk of surgical complications is greatly reduced because the procedure
is performed without an incision. Therefore, Gamma Knife radiosurgery is
virtually painless. Patients routinely use only a local anesthesia with a mild
sedative, thereby eliminating the side effects and dangers of general
anesthesia. The Gamma Knife is also an alternative when the patient's age or
other illnesses are a factor. One of the most important aspects of the Gamma
Knife is its precision, therefore minimizing any negative effects on surrounding
normal tissue. Treatment by Gamma Knife is a surgical procedure without physical
entry into the brain. The Gamma Knife is singularly dedicated to the treatment
of patients with brain lesions, which increases the degree of accuracy for every
procedure. Conventional neurosurgery means a lengthy hospital stay, expensive
medication and sometimes months of rehabilitation. The Gamma Knife reduces these
costs greatly. Patients are usually able to leave the medical center the same
day and resume their normal activities immediately. Post-surgical disability and
convalescent costs are nonexistent. The success rate of the Gamma Knife is
unprecedented. More that 41,000 patients have had Gamma Knife radiosurgery with
no mortality and minimal morbidity reported. Backed by two decades of
preclinical research no other neurosurgical tool has met with such impressive
results. Clinical applications continue to grow, and its many benefits as a
non-invasive treatment modality continue to make it a treatment of choice.
Chelation Therapy:
Chelation therapy is a medical treatment performed in a doctor's office
that improves metabolic function and blood flow through blocked arteries
throughout the body. This is accomplished by administering an amino acid,
ethylene-diamine-tetra-acetic acid (EDTA), by an intravenous infusion using a
small 25-gauge needle. This protocol for administering EDTA was developed and
refined by Elmer M. Cranton, MD, author of Bypassing Bypass Surgery and editor
of A Textbook on EDTA Chelation Therapy, Second Edition.
Typically, stable molecules contain pairs of electrons. When a chemical
reaction breaks the bonds that hold paired electrons together, free radicals are
produced. Free radicals contain an odd number of electrons, which makes them
unstable, short-lived, and highly reactive. As they combine with other atoms
that contain unpaired electrons, new radicals are created, and a chain reaction
begins. This process is essential for the decomposition of many different
substances at high temperatures. However, in the human body, oxidized free
radicals are believed to cause tissue damage at the cellular level - harming our
DNA, mitochondria, and cell membrane. Antioxidants are molecules that defend the
body from cellular damage by ending the free radical chain reaction before vital
molecules are harmed. Sometimes referred to as "free-radical scavengers," the
most commonly recognized antioxidants are vitamin E, beta-carotene (a pre-cursor
to vitamin A), and vitamin C. The trace metal selenium is required for the
function of one of our antioxidant enzyme systems, and is often included in
lists of antioxidant micronutrients (i.e., vitamins).
According to the Atlanta-based Edelson Center for Environmental and
Preventive Medicine, Dr. Denham Harman first proposed the theory of free radical
pathology in the 1950s, a professor emeritus at the University of Nebraska. Now
considered the father of the free-radical theory of aging, Harman believes that
we should reduce our intake of calories to decrease the incidence of disease.
Ongoing research studies the role of oxygen free radicals in cellular chemistry,
cancer treatment, and in a range of diseases including ALS, Parkinson's,
Alzheimer's, atherosclerosis, diabetes, and others.
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Hyperbaric Oxygen Therapy:
Hyperbaric oxygen therapy is breathing 100% oxygen at a pressure greater
than sea level atmospheric pressure (1 Atm). It involves the use of a
pressurized chamber for human occupancy and masks or hoods for breathing 100%
oxygen. It increases neuronal energy metabolism in the brain; can create
sustained cognitive improvement; wakes up sleeping (idling) brain cells that are
metabolizing enough to stay alive but are not actively "firing;" enhances the
body's ability to fight bacterial and viral infections; deactivates toxins and
poisons (e.g. side effects from some chemotherapy, spider bites, air pollution,
etc.); enhances wound healing by stimulating new capillaries into wounds; and
creates an immediate aerobic state.
Photoluminescence:
Photoluminescence (or blood irradiation) is a breakthrough therapy in which
a portion of a person's blood is removed from their body and placed underneath
ultraviolet light and then put back into the person's body stimulating their
immune system. It has been used extensively in Russia in place of antibiotics.
Amazing results have been seen as photoluminescence has been shown to treat:
Cancer, AIDS, Asthma, Pneumonia, Infections, Toxins, Food Poisoning, Diphtheria,
Perontitis, Gangrene, and Mumps. Photoluminescence is also known by other names:
hemo-irradiation, photopheresis, photochemotherapy, photobiological therapy,
photo-oxidation, ultraviolet blood irradiation or UBI, photon pump and
photodynamic therapy.
Thermography:
The International Academy of Clinical Thermology says that Thermography has
proved itself as an important tool, which aids in the diagnosis of cancer,
neurological, muscular, vascular, metabolic and endocrine disorders. Breast
thermography is a diagnostic procedure that images the breasts to aid in the
early detection of breast cancer.
The procedure is based on the principle that chemical and blood vessel
activity in both pre-cancerous tissue and the area surrounding a developing
breast cancer is almost always higher than in the normal breast. Since
pre-cancerous and cancerous masses are highly metabolic tissues, they need an
abundant supply of nutrients to maintain their growth. In order to do this they
increase circulation to their cells by sending out chemicals to keep existing
blood vessels open, recruit dormant vessels, and create new ones
(neoangiogenesis). This process results in an increase in regional surface
temperatures of the breast.
State-of-the-art breast thermography uses ultra-sensitive infrared cameras
and sophisticated computers to detect, analyze, and produce high-resolution
diagnostic images of these temperature and vascular changes. The procedure is
both comfortable and safe using no radiation or compression. By carefully
examining changes in the temperature and blood vessels of the breasts, signs of
possible cancer or pre-cancerous cell growth may be detected up to 10 years
prior to being discovered using any other procedure. This provides for the
earliest detection of cancer possible. Because of breast thermography's extreme
sensitivity, these temperature variations and vascular changes may be among the
earliest signs of breast cancer and/or a pre-cancerous state of the breast.
Breast thermography has been researched for over 30 years, and over 800
peer-reviewed breast thermography studies exist in the index-medicus. In this
database well over 250,000 women have been included as study participants. The
numbers of participants in many studies are very large ranging from 37,000 to
118,000 women. Some of these studies have followed patients up to 12 years.
Breast thermography has an average sensitivity and specificity of 90%.
SATELLITE MEDICAL CENTERS
Depending upon the demographics of an area and the medical needs of the
community, a Primary medical center could cost from $12 to $20 million or even
more, especially if multiples of equipment are needed for therapy, diagnostics
and screening, whereas Satellite medical centers should always cost around $3
million. Researching the demographic profile of a market to determine the
dynamic balance of a population with regard to age, health statistics, density
and capacity for expansion or decline is extremely expensive. The most
methodical demographic study covers a rather large area and is not flawless.
Picking the exact location to build within the geographical area studied is not
an exact science and at best is an educated guess.
Going out of business can easily become one of the consequences of choosing
a wrong location, which also holds true for hospitals, outpatient clinics and
medical centers. Mistakes are expensive and if a Primary center is built in the
wrong location, revenues could suffer dramatically. This is one time that the
proverbial "chicken and egg" question of which comes first, the Primary center
or several Satellite centers, is no longer debatable. Satellite centers must
come first and should be predominately obtained by the acquisition of
established radiation centers. Inherently, they include, referring physicians,
patient throughput, a revenue stream and net profit, all the unknown variables
one has to contend with to develop a business. Unless the center is in an area
where the population is drastically declining, demographics are no longer an
issue, as it is usually safe and prudent to purchase a profitable ongoing
business.
Typically, the medical centers to be acquired should have a daily patient
throughput (number of patients being treated) ranging from 15 to 25 people being
treated with equipment having an average age of 5 to 15 years old. Most of the
time the owner of such a medical center has made sufficient money to be looking
for an exit strategy, not wanting to spend extra money updating expensive
equipment. The cost to buy one of these medical centers will usually range from
$1.5 million to $4 million depending upon the patient throughput, net profit,
age and type of equipment, and whether the facility is leased or owned.
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Once a medical center is acquired, a Director of Business Development
should search within a 50-mile radius of that center for more acquisitions. The
typical rural radiation center is located in a small county of about 100,000
people covering roughly 500 square miles. These smaller counties usually adjoin
to a much larger county having several hundred thousand to more than a million
for its population. Therefore, if we average population densities
geographically, we can generalize that the average cluster of Satellite centers
would cover around 500 to 1,200 square miles with a population ranging from 1 to
3 million people. Depending upon the demographics, a population of 2 million
people could have 8 to 15 radiation centers, more than one-third of which would
be looking for an exit strategy.
Satellite centers should be relatively simple operations providing only
external beam radiation therapy. If the daily patient throughput is sufficiently
high at a particular Satellite center and warrants the installation of CT
simulation and/or brachytherapy, then it should be included; otherwise, a
Satellite center should only be equipped with a state-of-the-art linear
accelerator. Irrespective of patient volume, all patient treatment planning and
billing should be performed at the affiliated Primary centers. Patients
receiving external beam radiation therapy get treated 5-days per week for 4 to 8
weeks depending upon the type and severity of cancer. They are usually weak,
sometimes incapable of driving, and need to be within a 10 to 15 mile driving
distance of a Satellite center. Unless a person lives within a 15-mile radius of
a Primary center and uses it for daily treatment, they only need to visit the
Primary center occasionally.
PRIMARY MEDICAL CENTERS
When at least 3 Satellite medical centers have been acquired in a 500 to
1,200 square mile area that has a population ranging from approximately 1 to 3
million people, it is time to begin construction of a Primary medical center.
The demographics for determining the location of the Primary center should be
intertwined with the existing Satellite centers and strategically located. When
fully operational, Primary centers will include state-of-the-art comprehensive
screening, diagnostics, therapy, and preventative maintenance and care, treating
not just the disease, but also the body as a whole.
The strategy behind the concept of having clusters of 3 or more Satellite
centers with a fully comprehensive Primary center is to eliminate duplication of
procedures and consolidations of certain functions. In order to administer IMRT
radiation a patient must have CT scanning and simulation to determine the
treatment planning necessary for eradicating the tumor. A new CT simulator costs
approximately $700,000; the room to house it costs about $50,000; and the cost
of operation for the technician, repairs and maintenance, and insurance is
around $90,000 annually. Since a patient uses the CT simulator only a couple of
times during the therapy program, all patients should go to the Primary center
for scanning and simulation. Using an estimated 5-year life span for the
equipment, each Satellite center can save about $275,000 annually.
Inverse treatment planning is an absolute necessity for determining
accurate IMRT radiation doses. Although IMRT treatment planning is labor
intensive, averaging 3 hours per patient, consolidation won't necessarily save
money, but it should save an expense of $300,000 for the hardware at each
Satellite, which relates to an annual savings of about $75,000.
Medical centers pay 4% to 9% to billing companies to handle all of their
medical billing electronically, which can easily cost a center over $100,000
annually. Those that do their own billing internally spend at least $50,000 in
salary, plus benefits and other expenses, and have to include the initial cost
of the computer and billing software. To begin with, all patients need to go to
a Primary center for a CAT scan and to set-up their billing chart in the
computer. This should eliminate the duplication of expensive billing, saving
each center nearly $50,000 annually, and should be further simplified by having
all Primary centers forward their billing to the Corporate Medical Center.
Medicare and managed care providers such as insurance companies rarely pay
for skilled counselors to provide mental therapy for comforting the patient,
family and friends, and teaching them how to cope with such a debilitating
disease including the possibility of death; nor do they provide for physical
therapy and pain relief, or nutritionists; and least of all will they help the
patient secure a wig if necessary. This consolidation of efforts should yield a
much higher profit structure, which should provide the funds necessary to give
each patient a quality of unsurpassed medical care. Furthermore, the necessity
to treat 10 to 15 patients on a daily basis in order to breakeven may be
reduced. This is as much a part of the therapeutic and healing process as is the
radiation or chemotherapy, and to the best of Management's knowledge, Universal
Healthcare Management System's subsidiaries should be the only cancer centers to
provide these benefits to their patients.
A typical Primary center should require a building of approximately 20,000
square feet and should cost an average of $2 1/2 million, including interior
build-out, the construction of 2 radiation vaults to house state-of-the-art
linear accelerators, which on their own costs around $500 thousand to construct,
and all exterior accoutrements such as paving, lighting, drainage and
landscaping. The construction loan, coupled with the purchase of the property
for about $1 1/4 million would necessitate a mortgage of around $3 3/4 million.
Financing 100% of the cost for a term of 15 years at 10% interest would create
payments of $483,572 annually. Taxes and insurance on the property would be
around $120,000 per year. Adding to those expenses, the cost to manage the
building, plus repairs and maintenance, there would be an annual cost for
operating the property of about $625 thousand.
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Even though 2 vaults may be built, the facility will begin with one
state-of-the-art IMRT (Intensity Modulated Radiation Therapy) linear
accelerator, costing approximately $2 1/2 million including CT simulation,
inverse treatment planning, computers and peripheral equipment. Financing 100%
of this cost for a term of 5 years at 8.5% interest would create payments of
$615,496 annually. When patient throughput reaches 40 to 50 patients daily,
which is anticipated to be within the first year of start-up, a second linear
accelerator should be added bringing the total equipment cost to around $1 1/2
million, which if fully financed for a term of 5 years at 8.5% interest would
create additional payments of $369,298 annually.
The Company intends to establish a partnering type of relationship with
Varian Associates and General Electric to supply all equipment on a lease
purchase option and/or purchase basis. Treatment of 40 patients daily yields an
average net pretax profit of $1 1/2 million, which certainly warrants the
additional linear accelerator. Not only does this lighten the workload on the
one accelerator, but it gives enough additional treatment capacity to handle
extra patients from a Satellite should a unit not be working for more than a
couple of days. The combined cost of land, building and 2 state-of-the-art IMRT
linear accelerators is $7 3/4 million with an annual long-term debt expense of
$1,609,794. Add to this figure about $1 million for all operational expenses and
total operational expenses become approximately $2.6 million annually, which
would require a patient throughput of approximately 32 people being treated
daily to break even. Since the second linear accelerator should not be installed
until the facility treats at least 40 patients daily, this leaves an excess of 8
daily patient treatments, or a net profit of more than $1 million, which is more
than sufficient as a safety cushion.
The types of diagnostic, screening and other therapeutic equipment to be
utilized in the Primary centers is quite extensive. Therefore, only certain
machines and devices will be discussed. From an economics point of view, one
each brachytherapy unit, CT scanner, MRI scanner, PET scanner and Gamma Knife
should cost between $8 and $10 million depending upon the models and accessories
chosen. The demographics of a region should determine how many of each is
necessary and if a highly specialized and extremely expensive piece of equipment
such as a Gamma Knife will be installed. One Primary center may warrant only $6
million in equipment, while another needs $20 million. Diagnostics is not
specific to cancer only and, therefore, all physicians have the potential to
become referring physicians. There are too many variables involved to produce a
detailed analysis of the financial profit structure associated with diagnostic
and screening equipment and its complexity makes it beyond the scope of this
writing to include such an analysis. For this type of detailed analytical study
please refer to the independent Stock Valuation on the Company's website,
particularly its financial statements.
The name "Universal Healthcare Management Systems" shall serve a dual
purpose; first as the name of the parent corporation of several wholly owned
subsidiaries, and secondly as the name proudly displayed and associated with our
facilities. A Primary center medical complex will be known as the "Universal
Healthcare Management Systems Medical Center." One of our goals is to have these
buildings become the first of a nationwide network of health and wellness
medical centers dedicated to alleviating the pain, suffering and death caused by
cancer, and other debilitating diseases, including the decay of a person's
immune system. To this end, each center needs to have full diagnostic and
screening abilities, coupled with preventative care and maintenance through
progressive modern and integrative medicine, sometimes referred to as CAM
(Complementary and Alternative Medicine).
Other Cancer Therapy Modalities:
Oncology treatment will be one of several divisions within our medical
operations, and functionally will operate under the name of "Oncology Care and
Wellness Center." It is our goal to treat cancer patients with radiation,
brachytherapy, chemotherapy (if a local medical oncologist is not available),
and with other new methods or modalities as they become accepted, and to have
our own oncological medical team present at all medical centers. As of this
writing, the method of choice for treating cancers such as the leukemias and
lymphomas is still chemotherapy. Approximately 25% of the cancer patients that
undergo radiation therapy usually also receive chemotherapy. Hormonal and gene
therapy are in their infancy as a modality of choice for cancer therapy and may
have a larger influence on treatments in the future.
External beam radiation therapy has been the standard treatment modality
for the majority of cancer therapies. Although brachytherapy, also known as
high-dose rate brachytherapy, has been around for several decades, it is just
starting to become the treatment of choice, especially for prostate, breast and
lung cancer, so says the American Brachytherapy Society and several others.
Several urologists are now recommending this as the modality for treating their
patients. According to the International Journal of Radiation Oncology,
International Journal on Gynecologic Cancer, and Johns Hopkins Hospital,
research indicates that brachytherapy can be as effective as conventional
radiation therapy, has fewer side effects and is less costly, especially since
the initial investment is only a few hundred thousand dollars. Since the same
radiation oncologist that administers the linear accelerator should direct the
brachytherapy, the salary for the radiation oncologist should remain the same.
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Longitudinal Follow-up with Imaging:
It is often difficult to know the effectiveness of chemotherapy or
radiation treatments. Part of our total care concept is to perform longitudinal
studies to follow the progress of the disease. As a beginning to this effort, we
should employ state-of-the-art imaging equipment and cancer detection technology
to evaluate as best as possible the regression of the disease. This may be of
great value in determining whether further treatment is necessary or not, or
even if the treatment has sufficiently made the disease appear diminished. We
may be the only medical centers to ever follow a patient's progress with modern
technology.
Susceptibility Weighted Imaging:
Magnetic Resonance Imaging (MRI) is a powerful tool to non-invasively image
the human body. There have been numerous advances in technology that now make it
possible to image brain function, the cardiovascular system, and to do so very
quickly. This procedure is so safe that anyone can be imaged repeatedly without
any possibility of damaging the tissue in their body, which is especially
important for following the treatment of cancer. Recent developments in the
understanding of tumor formation involve the process of angiogenesis, the local
growth of blood vessels often associated with active tumors. MRI has the
potential to visualize regions of increased blood volume and to accurately image
the extent of the tumor. This is truer today with the development of a new
imaging method referred to as Susceptibility Weighted Imaging (SWI).
SWI has been used to study trauma, vascular disease, occult vascular
lesions and tumors. It is able to detect the presence of tumors often better
than the conventional methods that require a contrast agent and is able to show
how the vasculature is involved when present. SWI appears to be a superb means
for demonstrating the venous vasculature as well as visualizing
micro-hemorrhages, often an indication of an active tumor. Professor Haacke, a
pioneer in the area of MR angiography and the inventor of this method, continues
to apply it to practical clinical studies including a major effort in
delineating tumor boundaries, evaluating tumor vascularity and characterizing
the different tissue components in the tumor. This may have a direct impact on
how tumors should be treated with radiation. The better the tumor is understood,
the more efficient the treatment planning and design.
With the advent of clinical 3 Tesla (3T) systems, the applications of SWI
should continue to increase because the new high field systems offer better
quality images faster than at lower field strength. SWI should benefit from this
in that a larger region of interest can be covered and the sensitivity to very
small micro-hemorrhages or abnormal local changes in blood volume can be seen.
Siemens Medical Systems offers a state-of-the-art clinical system and has
collaborated with Dr. Haacke on the development and clinical applications of SWI
and other angiographic methods for more than fifteen years.
One of our goals is to not only treat patients, but also follow them
longitudinally over time to ensure that we understand what is occurring
physiologically in response to the different treatments applied whether they are
radiation, chemotherapy or a combination thereof. If SWI proves to be an
efficacious method for monitoring the growth and decay of a tumor, we may
incorporate its use with our MRI equipment at Primary medical centers.
Mental Therapy:
The American Cancer Society has proclaimed cancer to be the second leading
cause of death in the United States, and at the rate that it is growing; it may
soon take over first position. Unlike a fatal heart attack, cancer is a disease
that slowly and methodically deteriorates a person's body. Not only may the
victim suffer, but also family, friends and other loved ones, may endure a type
of mental anguish that is pure emotional torture. How do parents prepare
themselves to watch their child slowly die from a brain tumor? How does a spouse
watch their partner suffer the ravages of lung cancer? Just, who is the real
victim? A disease such as cancer has many victims, none of whom are prepared to
deal with its reality. There is no rival to the fear instilled by hearing the
word cancer - almost always perceived as a horrifying death sentence.
The name Oncology Care and Wellness Center was carefully chosen. "Care"
needs to be provided for the family and friends surrounding the patient as well,
for they are equally victims of this dreaded disease, and sometimes suffer more
than the patient. To this end, it is our intention to have highly qualified
personnel therapeutically counsel the patients and their loved ones on how to
cope with the mental pain and anguish caused by the frightening diagnosis, "You
have cancer." It is our goal that patients and their loved ones maintain the
highest quality of life possible while under our care and thereafter.
Whether Medicare and insurance companies pay for this much needed form of
therapeutic counseling or not, it needs to be unconditionally available for the
patient and the patient's family and friends. Insurance carriers have all but
destroyed the doctor patient relationship. Most HMOs will not allow a physician
to spend more than 10 to 15 minutes with a patient. Management cannot tolerate
this blatant erosion of the medical profession. Research has unequivocally shown
that a positive mental attitude hastens the healing and recovery process of all
patients, cancer or otherwise. There is enough profit generated by mainstream
cancer therapy to afford this psychotherapy without time restrictions and
without being reimbursed. Sometimes the will to survive is more effective than
the medicine itself.
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If one were to observe the facial expressions and mannerisms of the staff
in a typical medical clinic or hospital, they would be seen running the gamut
from austere to expressionless. This seriousness cannot be tolerated in our
medical centers. Cancer patients are well aware that they have a deadly disease
and that they may not survive. It would be an inconsistency with Management's
philosophy to allow this attitude. Regardless of their position, every employee
of Oncology Care and Wellness Center should be instructed in the importance of a
smiling face and courteous person, and that is a prerequisite to remaining
employed. A happy and positive attitude is contagious and will affect other
personnel, but particularly the patients, who could do without negativism. A lot
of thought and consideration was used when making "Care" and "Wellness" part of
the corporate name. It is Management's firm belief that the personal
relationship that existed years ago between the physician and the patient,
coupled with genuine "Care" and therapy, should lead to the overall "Wellness"
of the patient.
There is another phase of psychotherapy that is customarily overlooked,
that is, the fact that many cancer patients lose their hair. Chemotherapy drugs
attack rapidly growing cells such as hair and nail cells. If a patient so
chooses, before undergoing therapy, we will try to provide them with a hair
expert that will try to duplicate their hair as a wig. If this helps build the
confidence of the patient, or just makes them feel better, then the effort is
well worth the expense.
Progressive Integrative Medicine:
Many cancer patients that go into remission or appear to have been cured,
have the cancer return, and it may be much more aggressive when it reoccurs.
Curiously, once patients are diagnosed as cured or in remission, they are
usually dismissed, especially since insurance carriers consider them financial
risks. One would assume that Medicare or insurance companies would do everything
in their power to keep those persons healthy, as cancer therapy is expensive,
but too often, this is not their foremost concern.
This is where progressive integrative medicine coordinates all the efforts
and objectives of Universal Healthcare Management Systems. By definition
alternative means choice, optional, substitute, another, etc. and that's exactly
what it means for the medical industry; in other words, a different method of
treatment other than surgery, chemical drugs, etc. Integrative medicine, the
combination of mainstream and alternative medicine, is what all physicians
practiced for thousands of years until the 20th Century revolution of patented
chemical drugs. Some of these drugs are truly lifesavers, but far too many are
dangerous. Considering the billions of dollars of revenue generated by drugs, it
is unfortunate that the pharmaceutical manufacturers ignore an article printed
in the Journal of the American Medical Association stating that 100,000 people
die annually as a result of therapeutic drug misuse and are the third or fourth
leading cause of death. Even more alarming is the statistic from the National
Council on Patient Information and Education that at least 125,000 people each
year die from prescription drugs their doctors never should have given them,
because they had pre-existing conditions that are clearly contraindicated in the
drug's package insert.
An astounding 77% of Americans would prefer natural treatments rather than
prescription drugs. Not only is that astonishing, but 59% said they would change
doctors if they could find one who would utilize natural therapies before
resorting to prescription drugs. This is not because doctors are foolish or
irresponsible, but because it is impossible for them to stay abreast of every
new drug, multiple drug interactions, and the consequences, thereof. Most people
are aware that these "chemical wonders" come with a host of side effects, some
of which are worse than the ailment that they are being treated for.
Whereas, mainstream medicine uses drugs as a method of first choice,
integrative medicine physicians use drugs only as a last resort if there is no
natural therapy available that will suffice. Furthermore, there are certain
types of cancer that have been cured or put into remission without surgery,
drugs or radiation. Management is not suggesting or implying that a patient
should be treated with progressive alternative methods first, and if they fail,
then conventional therapy. Cancer cells mutate rapidly, and if alternative
methods fail, there may be insufficient time to help the patient. The decision
for the modality of treatment should be by the patient and their physician.
However, one can have the best of both worlds, and go one step further.
There are no guarantees that conventional or progressive alternative therapy
will be successful. Management does suggest that patients receive the benefit of
both therapies, that is, integrative medicine. Chemotherapy and radiation do
have side effects, a major one being the weakening of the immune system.
Integrative medicine should see that the patient is receiving proper nutrition,
minerals, vitamins, herbs, etc. and may have the patient undergo other
modalities such as hyperbaric oxygen therapy, blood photoluminescence,
chelation, etc. Dr. Susan Reynolds has agreed to become instrumental in
establishing our integrative medicine subsidiary.
Although the combination of therapies should be more effective than an
individual therapy, more than 90% of all cancer patients are treated with
surgery, chemotherapy, radiation, or a combination thereof. Most important is
what happens to the patient once therapy is finished. We have no intentions of
wantonly dismissing the patient. Once diagnosed with cancer, his wellness is our
life-long commitment. This is where progressive integrative medicine shines its
best - giving the patient sufficient care so that cancer may never have to be
reckoned with again. At some point the patient's bodily functions stopped
performing long enough for malignancy to get the upper hand and perpetuate the
growth of cancerous cells. Progressive integrative medicine seeks to correct
that deficiency and prevent it in the future. This is the true meaning of "Care"
and "Wellness."
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Diagnostics and Screening:
There are a number of new methods that should improve screening for cancer.
These include digital infrared imaging (DII) or thermography, ultrasound, blood
tests such as the Anti-Malignan Antibody in Serum test (AMAS), and Magnetic
Resonance Imaging (MRI). DII uses infrared cameras to detect patterns of
temperature change in tissue, which may allow one to detect cancer cells before
a tumor even forms.
Pre-cancerous cells begin to form up to 10 years before a tumor can be seen
by a mammogram. As cancer develops, neoangiogenesis occurs, which is the process
through which cancer cells develop a network of blood vessels necessary for
their growth. This oncological principle is responsible for the development of a
new class of cancer drugs called anti-angiogenesis agents, which are designed to
stop the cancer's food supply by blocking the development of new blood vessels.
However, until a cancerous tumor is present, a doctor would not know to
prescribe these drugs, but with digital infrared imaging a physician may obtain
an early warning. With the proposed array of imaging and testing methods, we
would be able to help evaluate the potential that a patient has for developing
cancer.
The unique beauty of the DII screening procedure is that when a woman has
an abnormal infrared breast image with no detectable mass, she has been warned,
perhaps several years in advance, of an impending danger. Hopefully, this should
give her enough time to thwart off the development of cancer by changing her
lifestyles and boosting her immune system, coupled with routine medical exams.
Breast thermography typically costs between $150 and $175, which is similar to
the cost of mammography, but holds great promise for detecting cancer
development.
In one study at Beth Israel Hospital in New York, the AMAS test
demonstrated amazing accuracy. Clinical studies have shown that the AMAS is up
to 95 percent accurate with the first reading, and up to 99 percent accurate
after two readings. The AMAS test can be used to detect any type of cancer.
Malignan is a peptide found in people with a wide range of cancers. A person's
body should detect the presence of this peptide if the anti-malignan antibody is
present in their blood and should launch an immune response against it. Although
a positive reading indicates that there are cancerous cells present, it cannot
specify the type or the location. AMAS may be an excellent alternative for
routine screening. With such a high rate of accuracy, a negative AMAS test
indicates that a mammogram or other screening procedure may not be necessary.
Since a positive reading would have to be followed by additional tests, the lack
of specificity is not necessarily a problem. Since antibody failure often occurs
late in malignancy, elevated antibody is then no longer available as evidence of
the presence of antigen and therefore, late in the disease, the AMAS test cannot
be used as a diagnostic aid, but may be useful for monitoring. The analysis
costs about $135 (not including extra lab fees or shipping costs), and the test
is Medicare approved.
Before and after treatment by radiation, a patient must be scanned by
computer tomography (CT), PET or MRI to determine the therapeutic procedures,
treatment program, and effectiveness, as is also the case with most other
modalities. This necessitates that we should have our own CT, PET and MRI
scanners with their associated computer systems. The aforementioned screening
tests and others that should be implemented require imaging of the body to
detect the exact location and size of the tumor, especially a positive result
from the AMAS test. Therefore, as an integral necessity for total cancer care, a
complete and comprehensive diagnostic and screening center, including a full
body scanner, PET scanner, various screening equipment, X-Ray, etc. are to be
employed. Our objective is to have all area physicians desiring to send their
patients to us for any diagnostic or screening purpose, and if cancer is
detected, they should be treated efficiently, effectively and with great care.
Physical Therapy and Pain Relief:
The benefits of exercise have been touted by every means of communication
for the past millennia. Gymnasiums and exercise centers are filled with people,
but mostly healthy men and women who want to stay fit. It's ironic that the
sicker people are, the less they exercise; yet they need it the most. Cancer
patients need moderate resistance and aerobic exercise. They need it to help
give them the strength to fight the disease and to stimulate their bodily
functions.
Most cancer patients will tell you that they are too weak to exercise, they
can't drive to a gym or afford the membership, or will be embarrassed exercising
in a public place in their condition. No more excuses - the plans call for an
exercise room to be incorporated in each Primary center being managed by a
physical or fitness therapist that should be able to develop exercise programs
tailored to individual needs. This benefit should be at no expense to the
patients as long as they remain under our care and supervision. Furthermore, all
of our employees should be encouraged to use the gym on a regular basis.
Modest aerobic and resistance exercise has worked wonders for
cardiovascular problems, diabetics, fatigue syndrome and countless other medical
conditions, including arthritic pain. At the ASTRO (American Society for
Therapeutic Radiology and Oncology) Convention in New Orleans this past October
5, 2002, thousands of oncological physicians were chastised in a seminar given
by a medical doctor guest speaker for neglecting pain relief for cancer
patients. Apparently, the results of a survey showed that only a very small
percentage of oncological physicians were concerned about pain relief for their
cancer patients. We cannot not let this happen! Part of "Oncology Care" is
remembering that cancer patients are entitled to a "quality of life," which is
impossible when in constant pain. Drugs should only be used for a patient's pain
relief if acupuncture, chiropractic and similar modalities are ineffective.
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Second Opinion Peer Review:
While the medical standard of the community is the guideline used for peer
review in most specialties of medicine, in oncology we are held to nationally
accepted criteria. The International Quality Program has been designed and
should be implemented to achieve this goal. Standards published and continuously
updated by the National Comprehensive Cancer Network, the National Cancer
Institute and other highly recognized bodies in the country are used as the
criteria by which consultations are reviewed and treatments are prescribed.
While there are valid reasons for physicians to sometimes recommend
otherwise, such as intercurrent illnesses, those prescriptions must be justified
in comparison to the Standards. The Program functions through an initial
agreement on the Standards to be applied for each commonly treated cancer. An
extensive review of the programs in place at the medical center is performed.
Once the elements of an approvable program are found to be in place, each
consultation is submitted for outside, independent professional peer review. All
data submitted are reported back to the treating physician within 48 hours. The
International Quality Program gives the treating physician the reassurance that
their method of evaluation and recommendation for treatment is in keeping with
the most modern methods of cancer treatment. It simultaneously reassures the
patient that they have had an independent second opinion and that their
physician is actively encouraging concurrent peer review.
STABILITY OF GROWTH
Need for Oncology Care Centers:
Since more than 1.3 million people are afflicted with cancer yearly, and
the rate is expected to double by the year 2050, we can extrapolate that to mean
that one half of one percent of the U.S. population now contracts cancer
annually and that by 2050 it should increase to at least one percent. Based on a
daily patient throughput of 15 to 25 persons, this warrants needing one cancer
center per 50,000 population or more than 5,000 facilities for the entire
country, which means that there is already a shortage of hundreds of medical
centers.
If one considers the fact that the U.S. has only a few thousand cancer
facilities now and that the incidence of cancer is expected to increase by
nearly 20% per decade, there should be the need for building more than 1,000
facilities every decade, which mandates constructing more than 100 new cancer
centers per year just to keep pace with the rate of incidence, exclusive of the
current shortage. Regardless of the competition, it is going to be an arduous,
if not impossible task for the entire medical industry to keep pace with the
growth rate of cancer.
Competitive Advantages:
The U.S. Census Bureau currently estimates life expectancy at more than 77
years of age, an increase of about 15 years in the past few decades, and at this
rate, it should be far into the 80s by 2050. Bodily functions diminish with age,
some literally disappearing. The immune system decays rapidly and disease
becomes the norm. As the population ages, not only will physicians be inundated
with more cancer cases, but with myriad other diseases. It is beyond
comprehension and nonsensical for the medical industry to pursue a path
requiring the construction of more than 5,000 cancer therapy centers over the
next 50 years.
Mainstream medicine functions under the philosophy of treating the symptoms
of a disease rather than the cause of it, mostly with surgery and drugs. For
example, taking pain relief drugs may make you feel better, but they will not
get rid of the cause of the pain. The drugs usually have side effects, many of
which are severe, and eventually, they will no longer camouflage the
manifestation created by the source of the pain. If you eliminate the reason for
the pain, you eliminate the symptoms and the use of potentially harmful drugs.
Modern cancer therapy exemplifies the case by treating the symptoms of
cancer, that is, the tumors, and not their cause. However, in the case of
cancer, it is absolutely essential that they be treated, because left untreated,
tumors will usually be fatal. It is imperative that cancer be treated with
radiation, chemotherapy, surgery, or a combination thereof if necessary, which
will usually eradicate the tumor or put it into regression. For this alone, all
mankind must be grateful to modern science. If we do not correct or improve the
bodily malfunctions that allowed the malignant growth to begin with, it is only
logical for the tumor to reappear regardless of the success of the therapy.
This is the failure of mainstream medicine in today's society. It
aggressively attacks the symptoms of cancer, but fails to address its cause.
Herein lies one of the major advantages between our Oncology Care and Wellness
Centers and the characteristic cancer therapy of our rivalry. Treating the
symptoms of cancer is the beginning and the end for our competition, but for us,
it is only the beginning. Preventive care and maintenance programs that treat
the body as a whole, not just the disease should be instituted in all Primary
medical centers. Unless instructed otherwise by a referring physician, patients
should initially be evaluated by our highly trained and skilled integrative
Primary care physicians, who should design a specialized therapeutic program
combining the most effective treatments of mainstream state-of-the-art therapy
with those of the best of complementary and alternative medicine, attacking the
cause and the symptoms of cancer. To truly win the war against cancer, it is
imperative that the body participates in the battle to the best of its ability,
and we intend to give it that opportunity.
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Competitive Differences:
What will set the Company apart and make us different from other treatment
centers? Practically all of the thousand plus radiation centers in America
perform radiation therapy only. We will have total mainstream oncology care, but
to some extent, so do various other clinics such as Mayo, Cleveland and U.S.
Oncology. However, this is where the similarity ends. All of our medical centers
should have the latest state-of-the-art three-dimensional IMRT radiation
therapy, providing the patient with the greatest chance of success with the
least side effects. When totally functional, our Primary medical centers should
be fully comprehensive with screening, diagnostics and imaging, all with
state-of-the-art equipment, integrative medicine, and perhaps the first, or only
medical centers to offer this on a national scale.
Second Opinion Peer Review through the International Quality Program is
only used by a couple of cancer centers and they are not national in scope.
Integrative medicine is practically unheard of in any cancer center, local or
otherwise. To the best of our knowledge, psychotherapy is not provided at any
cancer center, and if it was, it certainly would not be free of charge, nor do
they pay attention to how a person feels losing all of their hair.
Susceptibility Weighted Imaging (SWI) is a unique tool to the world of
imaging. It offers exceptional potential through patented vascular imaging to
detect tumors in their early stages of development, to study and analyze trauma
and cerebral hemorrhaging, to locate small blockages caused by a clot or plaque
resulting from a stroke, and to possibly predict Alzheimer's disease in its
early stages.
Clearly our goal is to care for the patient in an efficient way, but not at
the expense of the well-being of the patient. We will not sacrifice quality for
time. Perhaps our most important contribution to the medical industry will be
our inimitable ability to place medical care properly back in the hands of
capable and caring physicians, where they will not be hampered by time
constraints, and the physician and patient can decide upon the therapies to be
undertaken, not the physician and the insurance company's bottom line.
Is there competition? Yes, but do they provide "Oncology Care and
Wellness?" No. How many competitors tell their staff that regardless of their
personal problems, leave them at home, because they must smile and be friendly
with the patients making them feel special and "right at home," and that if they
can't be that way, they cannot continue their employment? The competition knows
the importance of exercise, but will they do like us and make sure that their
patients receive the benefits of exercise? How many clinics and hospitals are
concerned with a cancer victim's quality of life and total "Wellness?" Medical
centers such as the Company's get their patients by doctor referrals. Our goal
is to have cancer patients tell their doctor they insist on being treated by
Oncology Care and Wellness Center, independent of the physician's referral. That
is the epitome of success.
Use of Market Capitalization:
Our market capitalization should be used for expansion, acquisitions and
development of Primary medical centers. Depending upon the demographics,
procedures to be performed and the time involved, a linear accelerator can
generate revenues of $1 1/2 to $4 million annually, which translates to a pretax
income of close to 40% profit with the average linear accelerator generating a
profit of around $1 million. Consequently, because of the profit potential of
all operations for reinvestment, and the fact that capital can be raised through
Private Placement Memorandums and by the sale of stock in the public market,
capitalization will go towards debt liquidation and expansion.
Management is considering the acquisition of several radiation centers
generating substantial revenues, which average more than 25% net profit. Because
the Company is publicly traded, these radiation centers may be acquired for
stock or a combination of cash and stock. Several "Management with Option to
Purchase" contracts are being considered and if those medical centers prove to
be viable acquisitions during the management contract, the options will be
exercised.
GOALS AND OBJECTIVES
Clinics throughout the United States usually specialize in one modality of
therapy or diagnostics only, for example, radiation (external beam or
brachytherapy), hormonal, chemotherapy, MRI, PET, pain, etc., with hardly anyone
attempting to combine these clinical treatment facilities into a comprehensive
medical treatment center on a national scale. This consolidation of medical
modalities is cost efficient, practical and should enable the Company to
maintain a dossier containing a persons complete medical history in our
computerized database, allowing the patient freedom to travel for business or
pleasure, knowing that most likely one of our medical centers is nearby that can
treat them with the same care and efficiency as the one near home.
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Our ultimate goal is the well-being of individuals and their ability to
maintain a healthy and productive existence, living life to its fullest. This is
where preventative care and maintenance administered by alternative physicians
coupled with modern mainstream medicine come into play. Each Primary medical
center needs to have an integrative physician committed to illness and disease
cures, and preventative maintenance with the overall care, nutrition, immunity
and homeostasis (balance and harmony within the body) of all patients.
Diagnostics and screening need to function concurrently, to the point of
being synonymous. Effective screening provides early detection of cancer at a
stage where by it may be thwarted or controlled. Breast, prostate, colon and
lung cancers are numerous and deadly. Our goal is to have our diagnostic centers
provide inexpensive screening for all types of cancers. This would enable a
person to be examined annually at an affordable price, even if insurance
carriers refuse to pay for the service.
The only group in the country that looks closely at and accredits medical
programs is sponsored by JCAHO (Joint Commission for Accreditation of Healthcare
Organizations). Because preparation for a JCAHO survey is an incredibly
time-consuming effort requiring innumerable people working for a year or more to
produce hundreds of pages of documentation, medical businesses rarely seek this
accreditation. Nevertheless, we shall aspire to achieve this honor as one of our
long-term goals.
For some irrational reason, insurance companies would rather spend $100
thousand to treat a person for a disease, than a minimal amount to prevent it.
Apparently, the idiom, "An ounce of prevention is worth a pound of cure," is not
in their fiscal budget. After we have established around 6 fully operational
comprehensive Primary medical centers with their associated Satellite medical
centers, we should then have enough of a patient base to start opening our own
blood testing laboratory, thus allowing for comprehensive blood tests in a cost
efficient semi-automated computerized environment. A plethora of information
regarding a person's current health status and future potential medical problems
can be determined from measuring hundreds of various blood levels. This
methodology should become so efficacious that we anticipate physicians, clinics
and hospitals from across the country requesting us to test their patients'
blood, thus ultimately forcing insurance carriers to pay for the procedure.
Our medical centers should become the most sophisticated, efficient,
state-of-the-art, and fully integrated comprehensive medical centers dedicated
to the total health and well-being of the individual, resulting in an improved
quality of life. We may become the first nationwide medical diagnostic and
therapeutic network and should in reality have very little competition. Only
hospitals offer some of our proposed services, but because of their extremely
high costs of operation with in-patient care, specialized feeding, surgery, a
highly paid staff, and a host of other expenses, they can only hope to match our
efficiency or cost effectiveness. All of the aforementioned parameters and
conditions throughout this section play an integral part in, and are directly
related to the eventual success of many of the various subsidiaries of Universal
Healthcare Management Systems.
CORPORATE STRUCTURE AND DIVISIONS
By the end of 36 months of operation, we hope to have around 6 Primary
medical centers strategically located in various cities throughout the United
States functioning as the nucleus of clusters of comprehensive medical centers
surrounded by several acquired Satellite medical centers. To accomplish this
undertaking, our "Corporate Prototype Medical Center," described below, would
become instrumental and an integral necessity to our development. Our success in
fulfilling our goals is highly dependent upon our ability to raise capital.
Corporate Prototype Medical Center:
A prototype medical center known as our "Corporate Medical Center" needs to
be developed in South Florida to be used for corporate administration, training
and research compilation. Idealistically, all of our Primary medical centers
should be cloned from this special center, offering the same excellent
state-of-the-art medical equipment, services and treatments nationwide. The
fast-food industry replicates their establishments because it is extremely cost
efficient, and to give their patrons a comfort level, knowing that wherever they
go, everything should always be the same. However, our patients don't come to us
simply to satisfy a hunger crave, but with the hope of saving their lives.
Inclusive of land, construction and specialized medical equipment expenditures,
this Corporate Medical Center should cost approximately $25 million.
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From a psychological point of view, a patient has a much better chance of
surviving a deadly disease when exhibiting a healthy positive attitude. It is
our intention therefore, to reinforce this attitude by making all patients
completely comfortable and complacent regardless of their ailment or the
physical location of a center. Patients can have vacations and holidays, take
business trips, and even relocate, knowing that every one of our medical centers
should essentially be the same and that all of the staff, regardless of their
position, should have had the same extensive and rigorous centralized training.
A patient's well-being should always be our number one concern!
National Headquarters:
An office for the national headquarters of Universal Healthcare Management
Systems should be opened at the Corporate Medical Center. A professional
director of Human Resources needs to be hired to procure qualified personnel and
maintain their respective files for all of our subsidiaries. The Chief Financial
Officer will be responsible for the financial statements of all subsidiaries and
divisions with the subordinate companies having a comptroller reporting directly
to the CFO, and for all SEC filings. This consolidation of Human Resources and
finance should greatly reduce overhead and dramatically increase efficiency and
control over the Company's entire network. In order to avoid any conflicts of
interest with the inherent buying power and the large sums of monies to be
spent, a Director of Purchasing will be needed to process all purchases for the
network.
The medical centers with their various functions should be combined
together under one roof with a highly qualified administrator coordinating all
efforts and development. This important position of Director of Administration
should be headed by a person with several years of experience in hospital and/or
business administration, and have an MBA or higher. Office space for
subsidiaries such as real estate, acquisitions, billing, etc. should be
allocated appropriately, as well as space for the divisions for training,
research, computer systems and website development.
Medical Billing:
It is a common practice today for doctors, clinics and hospitals to use an
outside service for their medical billing due to the complexity of the matter
and the constantly changing rules and regulations of government agencies and the
various health insurance carriers. For this service, providers of all types pay
a fee ranging from 5% to 9% of the amount of monies collected. Our proposed
billing division, capable of electronic and paper billing verified through a
computerized and accredited custom clearing house, should be able to generate
revenues of around $1/2 to $1 million within a year after treatments start to
hopefully around $10 to $15 million within 4 to 5-years of operation. Since
overhead for this type of business should be a maximum of 50% of revenues, it
should become a very lucrative subsidiary.
Since the Company would already have an established customer base and
overhead by virtue of processing the accounts receivable for the Company's
medical centers, we should be extremely competitive at procuring new outside
business for the billing center, thus being able to have annual revenues
increase substantially. Initial expenses are basically for software, a few
computers, and office space and furniture for one person per medical center,
with the payroll being approximately $150 thousand to $200 thousand initially.
Thus, the revenues from literally one medical center should pay for all start-up
expenses plus the overhead for the first year of operation, leaving the
remaining centers to be much more profitable.
Training:
Universal Healthcare Management Systems believes that education and
training should be a life-long endeavor and that it does not end with
employment. Since we should have the most modern and advanced equipment in the
industry, we need to see that all personnel are adequately trained to operate
and interpret the results from the various procedures. This methodology should
insure that all medical centers are being run in a very professional manner.
Patients should not be able to distinguish one medical center from another
regardless of location, equipment or personnel. The person responsible for all
of this training should be stationed at headquarters, while the staff members
performing the training should work at our Corporate Medical Center and
periodically conduct training at all other centers.
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As we expand to more centers, we need to standardize the design of each
center. We need to appoint a Director of Training who should collaborate with
the Director of Administration and the Director of Human Resources to compile a
document of comprehensive job descriptions detailing the responsibilities,
obligations, requirements and necessary training for each position. They will be
responsible for teaching all of the necessary skills to the director of each
medical center and ensuring that this person is quite capable of administering a
medical center to our rigid standards. At unannounced times during the year,
senior directors are expected to inspect each medical center to insure that all
personnel are performing according to corporate standards.
Research:
The efforts and results of treatment and research conducted in the medical
centers should be coordinated through the Corporate Medical Center and
transmitted to the research office, compiled and consolidated, and when
warranted, be submitted for publication in peer review medical and scientific
journals throughout the country and at appropriate locations within our website.
Major efforts towards the eradication of cancer will be greatly facilitated by
having large number of physicians and technicians from dozens of medical centers
being able to statistically compile their results into the same database.
Universal Healthcare Management Systems will be doing its best to help make
great strides in curing and preventing these horrible diseases of mankind.
Because of our centralized, but distributed computing environments, our
ability to systematically real-time process the results of thousands of patient
treatments annually, should hopefully let us become a great benefit to the
medical profession. Utilizing a Microsoft and World Wide Web Compliant Platform,
we should bring a special uniqueness to our operation, consequently creating one
of the world's greatest computerized medical databases and an environment where
all physicians dedicated to the well-being of a person would want to be
associated. As new treatments and methodologies are created, we should develop a
following of thousands of diverse patients to work with beneficially.
Results should be known in months instead of years. Where else could a
doctor work to fulfill the life-long dream of curing a debilitating disease? As
the goals of Universal Healthcare Management Systems come to fruition, we hope
to attract the most brilliant medical minds the world has to offer.
One of the most significant consequences that our treatment and research
should make available is a patient profile search through our computerized
databases. While protecting patient privacy and complying with applicable
regulations, we hope to be able to have tens of thousands of patient's complete
medical history recorded in our databases along with; consumption of
prescription drugs, over-the-counter drugs, nutrients, vitamins and minerals;
procedures, treatments and any surgery; eating, lifestyle and exercising habits;
certain blood levels; and most importantly, health improvements thoroughly
categorized once under our care and supervision. This data should be available
both in non-specific gross format and on an individual basis for the proper care
and tracking of the individual patient. This system should enable any one of our
doctors to input a new patient's medical data into our computer system and
automatically search through thousands of non-identified medical profiles to
find persons with similar conditions and see exactly what procedures, drugs,
nutrients, etc. were effective, which ones were not, and the most likely course
of action to benefit and help treat the patient. This should help revolutionize
the medical profession and prevent a lot of misdiagnoses, wrong or inefficient
treatments, needless suffering and many deaths.
Computer Systems:
Universal Healthcare Management Systems would never be able to realize or
achieve any of its ambitious goals without an extremely sophisticated
state-of-the-art computerized network system. Corporate headquarters should
house the mainframe set-up in which all medical centers should automatically
transmit their daily events during closed hours including information such as
patients seen, therapy, results, details for the billing company, and research
and development results and observations. A centralization of data such as this
should allow a patient to use any medical center in America since his or her
profile could be obtained from the mainframe simply by the push of a button.
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Some of this information should automatically be sorted and compiled by the
computer and would not require further processing. The particulars that are
necessary for the billing company should be automatically routed to their
server, whereas, treatment, research and development data should go to a staff
for further processing, compilation and dissemination into our medical
databases, various websites, and medical and scientific journals for
publication, if appropriate. Obviously, it would be very easy to provide a long
and extensive dissertation about a sophisticated computer system is this
section. However, it is more beneficial and advantageous to discuss the
computer's involvement in each section where it becomes more apropos.
Website Medical Information Database:
Customer loyalty is the key element to financial success on the Internet.
Without it, devastating financial loss is inevitable. The Company should have an
extremely loyal customer base because it will help maintain a person's health
and hopefully extending their lifespan. Once completed, our Website Medical
Information Database will consist of hundreds of web pages, written in lay
terminology, discussing practically every cancer, its symptoms, prevention and
known methods of treatment, including links to publications of related
scientific and medical research. Our patients should be able to e-mail us any
medical questions they may have through our website and we hopefully may also
offer this service to the general public, unless it becomes too overwhelming.
Because of the importance of health and the fear of not being healthy,
suffering or dying, we hope to become one of the most visited health related
websites on the Internet. We deal with life threatening diseases and it is human
nature to be loyal to the medical professionals that are involved with your
health and obviously, your very existence. Anyone afflicted with a debilitating
disease such as cancer would most likely abide by the advice of their medical
counsel, especially as they see improvement. Not only should our patients be
loyal website browsers, but also they would probably persuade their family and
friends to visit our website, thus greatly extending the reach of the website.
WEBSITE
The growth and development of our computer system, Intranet/Extranet,
databases and website, should become an integral part of our success when we
introduce our E-commerce subsidiaries for the sales of pharmaceuticals and
nutritional health products. Even though these websites won't be available for
several years, they should slowly be incorporated into the design of our
corporate website. Thus, once established, while our patients and others browse
through our website seeking medical information and knowledge regarding diseases
and health maintenance or our latest research statistics or to e-mail us a
medical question, they would be exposed and linked to our revenue generating
websites.
Internet Loyalty:
Without a doubt, the World Wide Web is in the future of world trade. Very
few Internet only companies are profitable. Brick and mortar businesses have
been able to make a profit with the Internet by simply using it as another sales
tool or center. The reason Internet only companies have so much difficulty with
the World Wide Web is because they generally do not have a following of
clientele or a very loyal customer base generated by human relationships as is
established when a person physically visits and shops in a store, where they can
involve their senses of touch, taste, smell, and three dimensional
visualization, along with verbalization. Brand recognition as enjoyed by
companies such as Sony and Coca Cola, hardly exists. Today's newer companies
have hardly any customer loyalty and probably never will. A visit to their
website is "cold," predominately based on price and totally impersonal, lacking
human contact and warmth. More than two-thirds of the people that click onto the
Internet don't go past the first web page. This is why they have to spend so
much money advertising just to make a sale, and what's worse, is that they can't
effectively make you visit them again.
23.
<PAGE>
Website Revenues:
E-COMMERCE, in just a few short years, has caused the Internet to give rise
to the most monumental challenge in a new method of conducting business. It
gives the smallest of businesses the opportunity for worldwide expansion with
hardly any costs attached. The major key to success in this new endeavor is
perseverance, intelligence and ingenuity, and giving the shopper a reason for
being loyal to your website brand is paramount! This is still a ground floor
opportunity and Universal Healthcare Management Systems intends to take full
advantage of it.
We hope to be a leader setting the standards in this venture and to
eventually be one of the most used and discussed health related websites on the
Internet. While our patients and others browse through our website seeking
medical information and knowledge regarding diseases and health maintenance or
our latest treatment and research statistics, they would be functionally exposed
and strategically linked to our revenue generating websites. Universal
Healthcare Management Systems should be the parent corporation of two Internet
subsidiaries:
1) A Pharmaceutical Company
2) A Nutritional Health Company
Pharmaceutical Company:
The numerous medical centers that the Company would have throughout the
United States should have tens of thousands of patients. Obviously, either their
personal physicians or ours would most likely be prescribing or using various
drugs for their health and recovery from illness.
Our medical centers would be electronically linked through our
intranet/extranet computer system directly into our Pharmaceutical Company, thus
enabling our doctors to place a prescription electronically within seconds,
including the necessary electronic billing to the insurance carrier or patent's
credit card. Home delivery could be made by 10:30 A.M. the following morning
when necessary or 2 to 3 days later as in most cases.
We should be able to handle prescription refills most efficiently because
of our modern day electronics with our computer automatically generating renewal
notices 10 days ahead of time, benefiting our patients and us, so that they
should never have to call us as their supply of medicine dwindles knowing that
they should receive a fresh supply of medicine 5 to 7 days before running out.
Ultimately we may employ compounding pharmacists, thus enabling us to
provide more flexibility to meet the specific or special needs of our doctors or
any other physician in the United States. Because of our potential efficiency
and volume of sales, coupled with the existing high profit margin on
pharmaceuticals, we should be able to out perform and compete with any company,
thus generating healthy revenues with an excellent net profit.
Nutritional Health Company:
Did you know that over half of the American population takes some form of
nutritional supplements and that the sales of vitamins, minerals, herbs and
other nutrients grew by more than 60% in the 3-year period from 1997 to 2000?
The $100 billion pharmaceutical business, which dwarfs the $14 billion
nutritional industry, has started the millennium off by raising drug prices by
20%. What will this do to a profit margin structure that is now averaging a
whopping 42 percent? It is so profitable that the pharmaceutical companies are
able to spend more than $9,000 per doctor in the United States just to promote
their drugs, which will soon become second place to the billions of dollars
spent on direct consumer advertising through television and magazines.
The 7th Annual Conference on Anti-Aging Medicine announced that according
to a survey done by the New England Journal of Medicine, 77% of Americans would
prefer natural treatments rather than prescription drugs. Not only is that
astounding, but 59% said they would change doctors if they could find one who
would utilize natural therapies before resorting to prescription drugs.
Currently there are 60 million Americans that use the Internet to obtain various
types of health information or to make a purchase of some type of health product
on the Web.
24.
<PAGE>
Consider this fact; the Food and Drug Administration (FDA) regulates one
fourth of the gross national product of the United States. Benjamin Rush, George
Washington's doctor and the only physician to sign the Declaration of
Independence, lobbied to have medical freedom included as a right in the
Constitution. In his autobiography he wrote, "Unless we put medical freedom into
the Constitution, the time will come when medicine will organize into an
undercover dictatorship. To restrict the art of healing to one class of men and
deny privileges to others will constitute the Bastille of medical science. All
such laws are un-American and despotic and have no place in a republic. The
Constitution of this republic should make a special privilege for medical
freedom as well as religious freedom." Thomas Jefferson has often been quoted as
saying, "If people let the government decide what foods they eat and what
medicines they take, their bodies will soon be in as sorry a state as are the
souls who live under tyranny."
The autocracy of the FDA is now a reality and many a person has suffered
because of it. In 1991 the cost of getting a patent medicine approval was only
$318 million according to the Tufts University Center for the Study of Drug
Development. However, in 2003 that same approval cost $897 million and will most
likely be more than a billion in the next few years. This is the reason for
soaring patent medicine prices, and since the FDA is the one that collects these
colossal approval fees, they will continue to aggressively fight against any
natural products that could be used in place of a patented drug. Progressive
integrative medicine combined with natural cures and remedies is waging a strong
battle against the FDA and the pharmaceutical giants.
There is a bill before Congress to guarantee an individual's right to use
the medical therapies of their own choice, including those not sanctioned by the
FDA, provided that each person is informed of the possible side effects and that
the procedure is not approved by the FDA. The Access to Medical Treatment Act
(HR-2635 in the House and S-1955 in the Senate), if passed, will finally return
healthcare decision-making where it belongs, to the patient.
On December 18, 1840 in an address to the Illinois House of
Representatives, Abraham Lincoln eloquently stated the effect that a restriction
of choices can generate by saying, "Prohibition will work great injury to the
cause of temperance. It is a species of intemperance within itself, for it goes
beyond the bounds of reason in that it attempts to control a man's appetite by
legislation, and makes a crime out of things that are not crimes. A Prohibition
law strikes a blow at the very principles upon which our government was
founded."
An article written in the journal Emergency Medicine on September 2001 on
pages 60-72 by two doctors from the University of Washington School of Medicine
titled Recently Discovered Side Effects of New Medications, says, "One of the
unfortunate realities involving new drugs is that many of them are found to have
side effects, some life-threatening, that no one was aware of at the time of
their approval by the FDA." The commentary further states that although these
side effects could put you in the emergency room, the probability is that the
attending physicians most likely will not know that you are suffering from a
side effect of a medication that you are taking.
Because the market is being bombarded with so many new drugs, the authors
further stated, "Educating health care providers about these newly discovered
side effects is always difficult." Did you know that the Food and Drug
Administration is not required to inform the public about any reports once they
approve a drug? They assume that doctors and pharmacists will educate the
public. Accordingly, if doctors have a difficult time staying abreast of these
reports, how will their patients be affected?
The most prevalent reason for illness is deterioration of a person's immune
system, whereby one is unable to naturally fight the onslaught of disease. It is
necessary to have a good mechanic fine tune an engine so that it will run
properly, but it is more important to have a nutritionist and knowledgeable
physician fine tune your body's engine. Ironically, people are willing to spend
hundreds of dollars to keep their car running properly, while at the same time
ignoring the most important engine of all, but we will diligently try to reverse
that enigma.
25.
<PAGE>
People are inundated with countless bottles of vitamins and herbs on the
shelves of stores, many of which are of poor quality and practically useless.
The most significant claim that the pharmaceutical manufacturers can make,
unlike the nutriceutical manufacturers, is that their products are standardized,
which means that a pill made today and one made years later, will be identical.
We need to be more than different. Our vitamins, minerals and herbs should be
standardized, natural when possible, and of the highest quality and potency
available. They should be manufactured for purposes of daily health maintenance
and for the treatment of specific problems and illnesses. To this end,
Management has established a relationship with a large worldwide bio-medical
manufacturer that is eager to work with us.
As people see that they are becoming healthier and invigorated with more
mental and physical energy, and that certain causes and symptoms of pain are
being alleviated, they can be expected to stay with their health maintenance
regime for life. This obviously influences the cost of health insurance. Sales
and operations of the nutriceuticals would be handled exactly in the same manner
as with the Pharmaceutical Company or may be filtered through that company.
On March 13th, 2002 the European Parliament, a 626-member legislative body
that represents the 15 European Union countries passed the EU Directive on
Dietary Supplements, which categorizes vitamins as medical drugs rather than
food supplements, giving until 2005 for every EU country to abide by the
Directive. In less than 3 years hundreds of products will be made illegal for
over-the-counter sales, including well know items such as selenium and chromium
picolinate. Any products that are allowed to remain will contain such low
dosages, that they will not be of any therapeutic value.
The pharmaceutical companies do not like natural supplements because they
cannot be patented, give them no profit, and they have no control over their
dissemination, but by eliminating the competition of natural products treating
illnesses, they are ensuring the need for a prescription. Dr. Matthias Rath, a
leading researcher in the field of natural treatments for cancer, is one of the
most prominent crusaders fighting against the EU Directive.
This is not just a European problem, but also one that the FDA may want to
invoke. Universal Healthcare Management Systems wants to have its Nutritional
Health and Pharmaceutical companies well enough established so that in the event
the FDA were able to institute a similar directive as that in the EU, the
Company should be prepared to enable our patients get whatever nutritional
supplements are necessary.
STRATEGIC EXPANSION
Adherence to the proverb of, "You must crawl before you can walk, and walk
before you can run," dictates that we must first develop a group of Satellite
medical centers during the beginning of operations. This would give us an
immediate stream of revenue with healthy net profits. Satellite acquisitions
should have additional space available for expansion or be within a reasonable
distance of a location where a full medical center could be developed.
By the end of the second year of operations, we hope to have made enough
acquisitions to add at least three Primary medical centers annually. Most of the
Satellite medical centers would be acquired through the acquisition of an
existing radiation center or medical clinic, while a few may be built from the
ground up. Regardless of the scenario, medical centers should be developed and
operated to our ridged specifications and standards. Personnel from around the
country should be brought to our Corporate South Florida Training/Treatment and
Research Center where they would undergo extensive training and education.
26.
<PAGE>
Proper corporate growth and expansion necessitates the input of several
skilled medical experts, as it is important to address and explore the many
aspects of the un-met needs and requirements for total wellness patient care and
quality of life. To this end, an Advisory Panel of healthcare professionals
encompassing numerous specialties and sub-specialties, including integrative
medicine, should be established to provide continuous feedback to the Company.
This also includes the need for the determination of logistically placed centers
most appropriate for serving the best needs of our overall care and wellness
goals and philosophy.
It is hoped that by the end of the year 2006, that we would have around 6
fully operational comprehensive Primary medical centers with gross revenues of
approximately $85 million, generating a net pretax profit of $24 million, not
including the revenues and profits from Satellites or acquisitions, which would
greatly enhance those numbers. By the end of five years of operation as a public
company we hope to have about a dozen fully operational comprehensive Primary
medical centers grossing revenues of $165 million with net pretax profits of $40
million, not including the revenues and profits from Satellites or acquisitions,
which could potentially double those numbers.
Our long-term goal is to expand our medical centers throughout the United
States in a timely and efficient manner. South Florida was chosen as the
location for our corporate headquarters and the Training/Treatment and Research
Center because of the high incidence of cancer in Florida's aging population and
as the gateway to Latin America. After 5-years of successful operation we would
like to cross the bridge into the Caribbean and South and Central America.
Initially, bilingual medical professionals and technicians should be
thoroughly qualified at our Training Center and relocated with their families to
a medical center that would be built to our specifications in Latin America. It
is hoped that our first international undertaking, being in the Caribbean,
Mexico or Central America, would be during the year of 2008 and should be fully
operational by the following year. International locations should be chosen by
per capita income ratios and government participation and cooperation. The
countries that we would hope to establish ourselves in should give us incentives
such as tax favoritism, construction benefits, employment and educational
opportunities such as having their colleges train future personnel, and monetary
government participation and subsidization for indigent patent care. As was
stated previously, our success in fulfilling our goals is highly dependent upon
our ability to raise capital.
Item 2. Description of Property
On July 1, 2003, the Company entered into a new lease with Springtree
Country Club Plaza, Ltd. to rent new premises at 3801 N. University Drive, Suite
317, Sunrise, Florida 33351. The Company received one month's free rent and
commences paying rent on August 1, 2003. The Company is renting approximately
1,300 square feet of office space at an annual cost of $17,462 or 1,455 monthly
including all common area and taxes. The term of lease is 2 years expiring June
2005 with 2 options to renew for a further one year per option. The Company terminated its lease in November 2004 with the landlord without penalty. The Company is using the residence of its President currently until such time as the Company is able to obtain additional financing.
Item 3. Legal Proceedings
None
Item 4. Submission of Matters to a Vote of Security Holders
None
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
(a) Market Information
In August 2003 the Company received permission from the National
Association of Securities Dealers to trade on the NASDAQ exchange over the
counter bulletin board.(OTCC:BB) under the symbol UHMG.
The last trade was on December 27, 2004 at a price of $ 1.01 per share.
The following table sets forth the high and low sales prices per share since the
the Company's stock began trading.
2003
------------------------------
Quarter Ended High Low
------------- ---------------------
September 30 $ 5.00 $ 4.50
December 31 $ 6.51 $ 5.00
Sale of unregistered stock under Rule 144 during the last quarter ended
December 31, 2004 is as follows:
None
As of December 31, 2004 there are 209 holders of record who own common
stock in the Company.
Item 6. Management's Discussion and Analysis or Plan of Operation
FORWARD-LOOKING STATEMENTS
Some of the information in this report contains forward-looking statements
that involve substantial risks and uncertainties. You can identify these
statements by forward-looking words such as "may," "will," "expect,"
"anticipate," "believe," "intend," "estimate," and "continue" or similar words.
You should read statements that contain these words carefully for the following
reasons:
o the statements discuss our future expectations;
o the statements contain projections of our future earnings or of our
financial condition; and
o the statements state other "forward-looking" information.
28.
<PAGE>
It is important to communicate our expectations to our investors. There may
be events in the future, however, that we are not accurately able to predict or
over which we have no control.
Before you invest in our common stock, you should be aware that the
occurrence of any events that we have not predicted or assessed could have a
material adverse effect on our earnings, financial condition, and business. In
such case, the trading price of our common stock could decline, and you may lose
all or part of your investment.
This company is a development stage company and has no revenues in the fiscal period ended December 31, 2004 and has not had any revenues from inception.
Professional fees have decreased from $ 32,575 for the six months ended December 31, 2003 to $28,777 for the year ended December 31, 2004 which is mainly due to lesser audit and accounting fees for the year. In 2003 there were still costs associated with the filings necessary to take the Company public.
Consulting fees for the year ended December 31, 2004 were $ 88,750 as compared to $ 39,500 for the six months ended December 31, 2003. The only fees paid were to an investors relations firm in settlement of a lawsuit in January 2004.
Depreciation for the year ended December 31, 2004 was $8,983 as compared to $3,221 for six months ended December 31, 2003. The increase is due to the fact that this was for a full year versus six months and includes increases resulting from fixed asset additions.
Employee benefits for the year ended December 31, 2004 was $1,943 as compared to $8,991 for the six months ended December 31, 2003. This decrease is in direct correlation with the decrease in wages from $185,414 for the six months ended December 31, 2003 to $92,895 for the year ended December 31, 2004. The wage decrease was due to the lack of additional funding for the Company and therefore all staff had to be laid off during the year.
General and administrative expenses were $71,193 for the year ended December 31, 2004 as compared to $44,440 for the six months ended December 31, 2003 which on an annualized basis has decreased again because of the lack of funds to finance the Company. The main components of general and administrative expenses are insurance, rent, telephone, utilities, office and general, filing fees and bank service charges.
Littletown expenses represent mainly rent and occupancy costs paid by the Company during the year ended December 31, 2004 in connection with the acquisition of the cancer care center
Salaries, wages and benefits have decreased from $ 182,515 for the six months ended December 31, 2003 to $ 92,895 for the year ended December 31, 2004 mainly due to the lack of funds.
The Company has little cash on hand but until it acquires some cancer
Care center or raises additional capital, some of its operations may have
to be curtailed until additional funding is obtained. The Company is actively
seeking funding alternatives and believes it will be successful in raising
additional funds in order to meet its business objectives and its financial
needs for the future.
29.
Item 7. Financial Statements
UNIVERSAL HEALTHCARE
MANAGEMENT SYSTEMS, INC.
(A Development Stage Company)
Financial Statements
Period Ended December 31, 2003
INDEPENDENT AUDITORS’ REPORT
To the Board of Directors
Universal Healthcare Management Systems, Inc., Inc.
We have audited the accompanying consolidated balance sheets of Universal Healthcare Management Systems, Inc., Inc. (A Development Stage Company) as of December 31, 2004, and the related consolidated statement of operations, cash flows, and changes in stockholders’ equity for the year then ended and for the period December 26, 2001 (inception) to December 31, 2004. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Universal Healthcare Management Systems, Inc., at December 31, 2004, and the results of their consolidated operations and their cash flows for the year then ended and for the period, December 26, 2001 (inception) to December 31, 2004 in conformity with accounting principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company’s recurring losses from operations and its difficulties in generating sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern. Management’s plans concerning these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Michael Johnson & Co., LLC
Denver, Colorado
March 22, 2005
31.
UNIVERSAL HEALTHCARE MANAGEMENT SYSTEMS, INC.
(A Development Stage Company)
Consolidated Balance Sheet
December 31, | December 31, | |||
2004 | 2003 | |||
ASSETS: | ||||
Current Assets: | ||||
Cash | $ 154 | $ 40,386 | ||
Deposits | - | 159,200 | ||
Prepaid expenses | - | 1,700 | ||
Other asset | - | 585 | ||
Total Current Assets | 739 | 201,871 | ||
Fixed Assets: | ||||
Computer equipment | 18,741 | 18,741 | ||
Office furniture | 26,173 | 26,928 | ||
44,914 | 45,669 | |||
Less accumulated depreciation | (19,461) | (10,478) | ||
Net Fixed Assets | 25,453 | 35,191 | ||
TOTAL ASSETS | $ 25,607 | $ 237,062 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY: | ||||
Current Liabilities: | ||||
Accounts payable | $ 219,096 | $ 75,371 | ||
TOTAL CURRENT LIABILITIES | 219,096 | 75,371 | ||
Stockholders' Equity: | ||||
Preferred stock, $.001 par value, 100,000,000 | ||||
shares authorized: none outstanding | - | - | ||
Common stock, $.001 par value, 100,000,000 | ||||
shares authorized, 4,517,667 and 4,503,893 shares | ||||
issued and outstanding respectively at December | ||||
at December 31, 2004 and 2003 | 4,518 | 4,504 | ||
Common shares issuable | 172 | - | ||
Additional paid in capital | 2,429,323 | 2,262,275 | ||
Deficit accumulated during the development stage | (2,627,502) | (2,105,088) | ||
Total Stockholders' Equity | (193,489) | 161,691 | ||
| ||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 25,607 | $ 237,062 | ||
The accompanying notes are an integral part of these financial statements.
UNIVERSAL HEALTHCARE MANAGEMENT SYSTEMS, INC.
(A Development Stage Company)
Consolidated Statement of Operations
| (Inception) | |||||
Year | Six-Months | September 24, | ||||
Ended | Ended |
| 2001 to | |||
December 31, | December 31, | December 31, | ||||
2004 | 2003 | 2004 | ||||
REVENUES: | $ - | $ - | $ - | |||
OPERATING EXPENSES: | ||||||
Application fees | 7,051 | - | 71,751 | |||
Consulting fees | 88,750 | 39,500 | 828,711 | |||
Depreciation | 8,983 | 3,221 | 19,460 | |||
Employee benefits/payroll taxes | 1,943 | 8,991 | 32,983 | |||
General and administrative | 79,670 | 44,440 | 350,910 | |||
Littletown medical expenses | 203,770 | - | 203,770 | |||
Management fees | - | - | 168,132 | |||
Marketing, travel, and entertainment | 10,592 | 5,046 | 33,851 | |||
Professional fees | 28,777 | 32,575 | 241,059 | |||
Salaries and wages | 92,895 | 185,414 | 676,916 | |||
Total Operating Expenses | 522,431 | 319,187 | 2,627,543 | |||
Net Loss from Operations | (522,431) | (319,187) | (2,627,543) | |||
OTHER INCOME (EXPENSES) | ||||||
Interest income | 17 | 24 | 41 | |||
Net Loss from Operations | $(522,414) | $(319,163) | $(2,627,502) | |||
Weighted average number of | ||||||
shares outstanding | 4,529,389 | 4,478,598 | ||||
Net Loss Per Share | $ (0.10) | $ (0.07) | ||||
The accompanying notes are an integral part of these financial statements.
33.
<PAGE>
UNIVERSAL HEALTHCARE MANAGEMENT SYSTEMS, INC.
(A Development Stage Company)
Consolidated Statement of Cash Flow
INDIRECT METHOD
| (Inception) | ||
| September 24, | ||
Year | Six-Months | 2001 | |
Ended | Ended | to | |
December 31, | December 31, | December 31, | |
2004 | 2003 | 2004 | |
Cash Flows From Operating Activities: | |||
Net loss | $(522,414) | $(319,163) | $(2,627,502) |
Adjustments to reconcile net loss to net cash | |||
used in operating activities: |
|
|
|
Depreciation | 8,983 | 3,221 | 19,460 |
Stock issued for services | - | 35,000 | 499,646 |
Changes in assets and liabilities: | |||
Decrease in deposits | 159,200 | - | - |
(Increase)decrease in other assets | 2,285 | (1,700) | - |
Increase in accounts payable | 143,725 | 67,808 | 219,096 |
Total adjustments | 230,607 | 104,329 | 654,618 |
Net cash used in operating activities | (208,221) | (214,834) | (1,869,323) |
Cash Flow From Investing Activities: | |||
Purchase of computer equipment | - | (12,609) | (45,669) |
Proceeds on sale of assets | 755 | - | 755 |
|
|
| |
Net cash used in investing activities | 755 | (12,609) | (44,914) |
Cash Flow From Financing Activities: | |||
Donated capital | - | 11,685 | 11,685 |
Issuance of common stock | 167,234 | 205,251 | 1,867,706 |
Net cash provided by financing activities | 167,234 | 216,936 | 1,934,367 |
Increase (Decrease) in cash | (40,232) | (10,507) | 154 |
| |||
Cash and cash equivalents - beginning of period | 40,386 | 50,893 | - |
Cash and cash equivalents - end of period | $ 154 | $ 40,386 | $ 154 |
Supplemental Cash Flow Information: | |||
Interest paid | $ - | $ - | $ - |
Taxes paid | $ - | $ - | $ - |
The accompanying notes are an integral part of these financial statements.
UNIVERSAL HEALTHCARE MANAGEMENT SYSTEMS, INC.
(A Development Stage Company)
Consolidated Statement of Changes in Stockholders' Equity
For the Period September 24, 2001(Inception) to December 31, 2004
Deficit | |||||||
Accumulated | |||||||
Common Stock | Additional | During the | |||||
Common Stock | Issuable | Paid-In | Development | ||||
Shares | Amount | Shares | Amount | Capital | Stage | Totals | |
Balance - December 26, 2001 | - | $ - | $ - | $ - | $ - | ||
| |||||||
Stock issued for cash | 760,765 | 761 | - | - | 684,613 | - | 685,374 |
Stock issued for cash | 176,130 | 176 | - | - | 75,215 | - | 75,391 |
Stock issued for services | 650,000 | 650 | - | - | 5,850 | - | 6,500 |
Net loss for period | - | - | - | - | - | (468,683) | (468,683) |
Balance - June 30, 2002 | 1,586,895 | 1,587 | - | - | 765,678 | (468,683) | 298,582 |
Correction of prior year's stock | (680,000) | (680) | - | - | 680 | - | - |
Stock issued for cash | 1,905,198 | 1,905 | - | - | 369,845 | - | 371,750 |
Stock issued for services | 1,146,850 | 1,147 | - | - | 456,999 | - | 458,146 |
Warrants exercised | 481,523 | 481 | - | - | 417,201 | - | 417,682 |
Net loss | - | - | - | - | - | (1,317,242) | (1,317,242) |
Balance - June 30, 2003 | 4,440,466 | 4,440 | - | - | 2,010,403 | (1,785,925) | 228,918 |
Stock issued for cash | 30,707 | 31 | - | - | 85,519 | - | 85,550 |
Stock issued for services | 7,000 | 7 | - | - | 34,993 | - | 35,000 |
Stock issued for cash | 25,720 | 26 | - | - | 119,675 | - | 119,701 |
Donated capital | - | - | - | - | 11,685 | - | 11,685 |
Net loss | - | - | - | - | - | (319,163) | (319,163) |
Balance - December 31, 2003 | 4,503,893 | 4,504 | - | - | 2,262,275 | (2,105,088) | 161,691 |
Stock issued for cash | 63,774 | 64 | - | - | 112,244 | - | 112,308 |
Cancellation of stock | (50,000) | (50) | - | - | - | - | (50) |
Common shares issuable for debt | 172,000 | 172 | 54,804 | - | 54,976 | ||
Net loss | - | - | - | - | - | (522,414) | (522,414) |
Balance - December 31, 2004 | 4,517,667 | $ 4,518 | 172,000 | $ 172 | $2,429,323 | $(2,627,502) | $(193,489) |
The accompanying notes are an integral part of these financial statements.
UNIVERSAL HEALTHCARE MANAGEMENT SYSTEMS, INC.
(A Development Stage Company)
Notes To Financial Statements
December 31, 2004
Note 1 - General
Nature of Business
Universal Healthcare Management Systems, Inc., Inc. (the “Company”) was incorporated on December 26, 2001 under the laws of the State of Florida. The Company’s primary business activity is to complete the construction of a medical facility dedicated to the treatment of cancer related diseases. The Company plans on constructing and/or acquiring several different locations over time.
In May of 2002, the Company acquired its wholly owned subsidiary Oncology Care and Wellness Center (Oncology) through a recapitalization, by the issuance of 760,765 shares of the Company’s common stock for all the outstanding shares of Oncology. This transaction was accounted for using the purchase method and the operations of Oncology are consolidated for financial reporting purposes. Oncology was incorporated on September 24, 2001. After acquisition, Oncology became inactive.
The Company’s fiscal year end is December 31.
Going Concern
The financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the normal course of business. The Company incurred a net loss of $439,414 for the year ended December 31, 2004 and has a working capital deficit of approximately $135,942 at December 31, 2004. The ability of the Company to operate a going concern is dependent upon its ability (1) to obtain sufficient debt and/or equity capital and/or (2) cut operating costs such that the Company can operate until such time that it resumes generating positive cash flow from operations.
The future success of the Company is likely dependent on its ability to attain additional capital to develop its products and ultimately, upon its ability to attain future profitable operations. There can be no assurance that the Company will be successful in obtaining such financing, or that it will attain positive cash flow from operations. The successful outcome of these or any future activities cannot be determined at this time and there is no assurance that if achieved, the Company will have sufficient funds to execute their business plans or generate positive operating results. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.
UNIVERSAL HEALTHCARE MANAGEMENT SYSTEMS, INC.
(A Development Stage Company)
Notes To Financial Statements
December 31, 2004
Note 2 - Summary of Significant Accounting Policies:
Basis of Presentation - Development Stage Company
The Company has not earned any revenue from limited principal operations. Accordingly, the Company’s activities have been accounted for as those of a “Development Stage Enterprise” as set forth in Financial Accounting Standards Board Statement No. 7 (“SFAS 7”). Among the disclosures required by SFAS 7 are that the Company’s financial statements be identified as those of a development stage company, and that the statements of operations, stockholders’ equity (deficit) and cash flows disclose activity since the date of the Company’s inception.
Basis of Accounting
The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States. Significant accounting principles followed by the Company and the methods of applying those principles, which materially affect the determination of financial position and cash flows are summarized below.
Basis of consolidated financial statements include the accounts of Universal Healthcare Management Systems, Inc. and its wholly owned subsidiaries, Oncology Care and Wellness Center, Inc, and Universal Holding & Development Inc. All significant intercompany transactions and balances have been eliminated on consolidation.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considered all
cash and other highlyliquid investments with initial maturities of
three months or less to be cash equivalents.
Property and Equipment
The Company follows the practice of capitalizing property and equipment is stated at cost in excess of $500. The cost of ordinary maintenance and repairs is charged to operations while renewals and replacements are capitalized. Depreciation is computed over the estimated useful lives of the assets generally as follows:
Computers, Equipment & Furniture
5 years
UNIVERSAL HEALTHCARE MANAGEMENT SYSTEMS, INC.
(A Development Stage Company)
Notes To Financial Statements
December 31, 2004
Note 2 - Summary of Significant Accounting Policies: (Continued)
Depreciation expense for 2004 was $8,983.
Income Taxes
The Company accounts for income taxes under SFAS No. 109, which requires the asset and liability approach to accounting for income taxes. Under this method, deferred tax assets and liabilities are measured based on differences between financial reporting and tax bases of assets and liabilities measured using enacted tax rates and laws that are expected to be in effect when differences are expected to reverse
Other Comprehensive Income
The Company has no material components of other comprehensive income (loss) and accordingly, net loss is equal to comprehensive loss in all periods.
Net earning (loss) per share
Basic and diluted net loss per share information is presented under the requirements of SFAS No. 128, Earnings per Share. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period, less shares subject to repurchase. Diluted net loss per share reflects the potential dilution of securities by adding other common stock equivalents, including stock options, shares subject to repurchase, warrants and convertible preferred stock, in the weighted-average number of common shares outstanding for a period, if dilutive. All potentially dilutive securities have been excluded from the computation, as their effect is anti-dilutive.
Fair Value of Financial Instruments
The carrying amount of cash, deposits, accounts payable are considered to be representative of their respective fair values because of the short-term nature of these financial instruments.
Note 3 – Warrants
Each of the existing shareholders has been given a warrant to purchase additional stock equivalent to the amount of stock already owned. The warrant to purchase is exercisable only after the first day upon which the Company begins trading as a public entity. The warrant to purchase is good for 90 days after which it becomes null and void. The exercise price is determined by the average “Closing Bid Price of the common stock of the Company for the five (5) trading days prior to the “Date of Exercise.” If the stock has not trade for five (5) days, then the closing price of the last day before the exercise date shall be used as the exercise price. The holder of a warrant to purchase agrees that the resale of the shares issuable upon exercise may be subject to “lock-up” pursuant to any
UNIVERSAL HEALTHCARE MANAGEMENT SYSTEMS, INC.
(A Development Stage Company)
Notes To Financial Statements
December 31, 2004
Note 3 – Warrants(continued)
restrictions reasonably required by any underwriter, if applicable, and to the extent the Company undertakes a secondary offering.
In the event that the Company proposes to file a registration statement under the Act, the Company must give the Holder of such warrant fifteen days written notice prior to the filing of such registration statement. If the Holder wishes to include his warrant stock as part of the registration statement, any written notice of such intention must be made and given to the Company not lees than five (5) days prior to the date specified in the notice as the date on which such registrations statement is intended to be filed. The exercise price is the same price paid originally.
The Company has issued a total of 906,895 warrants entitling the holder to one common share per share warrant. As of December 31, 2004, the Company had issued 481,523 warrants as follows:
156,875 at a price of $.80 per share in the amount of $125,500
324,648 at a price of $.90 per share in the amount of $292,182
The shareholders who had made loans of more than $25,000 initially and who had been given warrants at an exercise price of $.80 per share. The balance of the warrants exercised represented an exercised equal to the conversion price of the shareholders original loans to the Company’s wholly-owned subsidiary, to shares of the Company.
Note 4 – Income Taxes
There has been no provision for U.S. federal, state, or foreign income taxes for any period because the Company has incurred losses in all periods and for all jurisdictions.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of deferred tax assets are as follows:
Deferred tax assets
Net operating loss carryforwards
$2,544,502
Valuation allowance for deferred tax assets
(2,544,502)
Net deferred tax assets
$ -
Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which are uncertain. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance. As of December 31, 2004, the Company had net operating loss carryforwards of approximately $2,544,502 for federal and state income tax purposes. These carryforwards, if not utilized to offset taxable income begin to expire in 2016. Utilization of the net operating loss may be subject to substantial
UNIVERSAL HEALTHCARE MANAGEMENT SYSTEMS, INC.
(A Development Stage Company)
Notes To Financial Statements
December 31, 2004
Note 4 – Income Taxes(continued)
annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. The annual limitation could result in the expiration of the net operating loss before utilization.
Note 5 – Capital Stock Transactions
At December 31, 2004, The Company had 25,617,667 shares of common stock outstanding. During the year, the Company had entered into a memorandum of understanding to obtain interest in gas and oil properties and had issued 19,000,000 shares of common stock to two investors. In January 2005, the Company rescinded this memorandum of understanding and the stock was canceled. During the year, the Company also sold 2,100,000 shares of common stock to two other investors, which are in the process of being canceled for insufficient funds in January 2005.
In December 2004, the Company committed to issue 172,000 shares of common stock to two individuals for cancellation of debt of $54,976.
Note 6 – Recent Accounting Pronouncements Issued, Not Adopted
In February 2003, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity” (SFAS No. 150”). The provisions of SFAS No. 150 are effective for financial instruments entered into or modified after May 31, 2003, and otherwise are effective at the beginning of the first interim period beginning after June 15, 2003, except for mandatorily redeemable financial instruments of nonpublic entities. The Company has not issued any financial instruments with such characteristics.
In December 2003, the FASB issued FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities” (FIN No. 46R”), which addresses how a business enterprise should evaluate whether it has a controlling financial interest in an entity through means other than voting rights and accordingly should consolidate the entity. FIN No. 46R replaces FASB Interpretation No. 46, “Consolidation of Variable Interest Entities”, which was issued in
January 2003. Companies are required to apply FIN No. 46R to variable interests in variable interest entities (“VIEs”) created after December 31, 2003. For variable interest in VIEs created before January 1, 2004, the Interpretation is applied beginning January 1, 2005. For any Vies that must be consolidated under FIN No. 46R that were created before January 1, 2004, the assets, liabilities and non-controlling interests of the VIE initially are measured at their carrying amounts with any difference between the net amount added to the balance sheet and any
UNIVERSAL HEALTHCARE MANAGEMENT SYSTEMS, INC.
(A Development Stage Company)
Notes To Financial Statements
December 31, 2004
Note 6 – Recent Accounting Pronouncements Issued, Not Adopted (Continued)
previously recognized interest being recognized as the cumulative effect of an accounting change. If determining the carrying amounts is not practicable, fair value at the date FIN No. 46R first applies may be used to measure the assets, liabilities and non-controlling interest of the VIE. The Company does not have any interest in any VIE.
In December 2004, the FASB issued SFAS No 123(R)(revised 2004), Share-Based Payment” which amends FASB Statement No. 123 and will be effective for public companies for interim or annual periods after June 15, 2005. The new standard will require entities to expense employee stock options and other share-based payments. The new standard may be adopted in one of three ways – the modified prospective transition method, a variation of the modified prospective transition method or the modified retrospective transition method. The Company is evaluation how it will adopt the standard and evaluating the effect that the adoption of SFAS 123(R) will have on our financial position and results of operations.
In November 2004, the FASB issued SFAS No 151, Inventory Costs, an amendment of ARB No. 43, Chapter. This statement amends the guidance in ARB No. 43, Chapter 4, Inventory Pricing, to clarify the accounting for abnormal amounts of idle facility expense, freight, handling cost, and wasted material (spoilage). Paragraph 5 of ARB No. 43, Chapter 4, previously stated that “. under some circumstances, items such as idle facility expense, excessive spoilage, double freight, and rehandling costs may be so abnormal as to require treatment as current period charges.” SFAS No. 151 requires that those items be recognized as current-period charges regardless of whether they meet the criterion of “so abnormal.” In addition, this statement requires that allocation of fixed production overheads to the costs of conversion be based on the prospectively and are effective for inventory costs incurred during fiscal years beginning after June 15, 2005, with earlier application permitted for inventory costs incurred during fiscal years beginning after the date this Statement was issued. The adoption of SFGAS No. 151 is not expected to have a material impact on the Company’s financial position and results of operations.
In December 2004, the FASB issued SFAS No.153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29. The guidance in APB Opinion No. 29, Accounting for Nonmonetary Transactions, is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of assets exchanged. The guidance in that Opinion, however, included certain exceptions to that principle. This Statement amends Opinion 29 to eliminate the exception for nonmonetary exchanges of similar productive assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for nonmonetary exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of SFAS No. 153 is not expected to have a material impac t on the Company’s financial position and results of operations.
Item 8. Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure
There are no changes in and disagreements with accountants on accounting
and financial disclosure.
Item 8A. Control and Procedures
As required by Securities and Exchange Commission rules, we have evaluated
the effectiveness of the design and operation of our disclosure controls and
procedures as of the end of the period covered by this report. This evaluation
was carried out under the supervision and with the participation of our
management, including our principal executive officer and principal financial
officer. Based on this evaluation, these officers have concluded that the design
and operation of our disclosure controls and procedures are effective. There
were no significant changes to our internal controls during the period covered
by this annual report that materially affected, or are reasonably likely to
materially affect, our internal controls over financial reporting.
Disclosure controls and procedures are our controls and other procedures
designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act are recorded, processed,
summarized and reported, within the time periods specified in the Securities and
Exchange Commission's rules and forms. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by us in the reports that we file under the
Exchange Act are accumulated and communicated to our management, including our
principal executive officer and principal financial officer, as appropriate, to
allow timely decisions regarding required disclosure.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act.
The Board of Directors of the Company is currently composed of eight (8)
members, each of whom serves for a term of three years.
NAME AGE POSITION TERM
<S> <C> <C> <C>
Edward R. Annis, M.D. 90 Director, Physician Relations 9/05
E. Mark Haacke, Ph.D. 52 Director, Diagnostics & Imaging
Development 9/05
Daniel K. Kido, M.D. 64 Director, Diagnostics & Imaging
Research 9/04
Kenneth N. Hankin 60 Director, Chairman, CEO,
President 9/05
Ardie R. Nickel 72 Director, Scientific & Medical
Development, Secretary 9/05
Arthur T. Porter M.D.,
M.B.A. 47 Director, Radiation and 9/05
Oncology Care
Susan F. Reynolds M.D.,
Ph.D. 54 Director, Human Resources
& Integrative Medicine 9/05
William J. Walker, Jr.,
Ph.D. 66 Director, Physics &
Treatment Planning 9/05
Every year, one-third of the board members are up for election to serve a
3-year term.
The Company has not compensated its directors for service on the Board of
Directors or any committee thereof. As of the date hereof, no director has
accrued any expenses or compensation. Officers are appointed annually by the
Board of Directors and each executive officer serves at the discretion of the
Board of Directors. The Company does not have any standing committees at this
time.
No director, or officer, or promoter of the Company has, within the past
five years, filed any bankruptcy petition, been convicted in or been the subject
of any pending criminal proceedings, or is any such person the subject of any
order, judgment or decree involving the violation of any state or federal
securities laws.
The business experience of the persons listed above during the past five
years are as follows:
EDWARD R. ANNIS, M.D. currently serves as the Director of Physician
Relations for the company. From 1977 until now, he has been appointed chairman
of the Florida Medical Associations Speakers Bureau. For the past 5 years, he
has served as an advisor to Cleveland Clinics. He is a world-renowned general
surgeon and former president of the American Medical Association and the World
Medical Association. Dr. Annis received his medical degree from Marquette
University in Milwaukee, Wisconsin.
E. MARK HAACKE, Ph.D. was a professor in the Department of Radiology and
Electrical Engineering at the Mallinckrodt Institute of Radiology at Washington
University from August 1993 to 1999 and has served as the director of The
Magnetic Resonance Imaging Institute for Biomedical Research in St. Louis,
Missouri from July 1999 to the present. He is a research scientist, professor,
lecturer, author and educator that has received in excess of $6 million for more
than 30 different grants and has authored and coauthored over 125 Referenced
Publications, 2 Books, Chaired and Organized numerous International Conferences,
given 67 Invited Talks and Chaired Sessions, authored 252 Conference Abstracts,
and has educated over 50 people in the field of MRI. Dr. Haacke is a life member
of the Society of Exploration Geophysicists and the American Physical Society
and is currently an associate editor of Magnetic Resonance Imaging, associate
editor of Journal of Magnetic Resonance Imaging, and editorial board member of
the Journal of Magnetic Resonance. He received a Bachelor of Science degree from
the University of Toronto in mathematics and physics, his Masters of Science
degree from the University of Toronto in Theoretical Physics, and his Ph.D. from
the University of Toronto in Theoretical High-Energy Physics. His Doctoral
Thesis was on SU(4) and Higher Symmetries in Inclusive Lepton-Hadron Scattering.
He is also fluent in the French and German languages.
KENNETH N. HANKIN currently serves as President, Chairman of the Board and
CEO for the company. In early 1999 he was an independent contractor hired by
Radiation Centers of America, Inc. and in 2000 became employed as the Chief
Operating Officer and Executive Vice-President for them of and all of their
subsidiaries. Prior to that he served as President and CEO of Global Marketing
from 1990 to 1999. Mr. Hankin served as an officer of the Institute of
Electrical and Electronics Engineers, President of the Mineralogical and
Lapidary Guild, member of the Zoological Society, the International Bonsai
Society and the International Oceanographic Foundation. He attended the
University of Florida and is degreed as a Bachelor of Science in Electrical
Engineering from the University of Miami. He furthered his education at
Georgetown University and George Washington University while he was with the
Department of Defense in Washington, D.C. and also holds degrees in Mathematics,
Oceanography, Marine Biology and a Masters in Business Administration.
DANIEL K. KIDO, M.D. has been a Professor of Radiology at the Loma Linda
University School of Medicine and the Chief of the Neuroradiology Section at the
Loma Linda University Medical Center in California from 2000 to the present time
and is responsible for the performance, supervision, and consultation for
neuroangiograms, myelograms, computed tomograms and magnetic resonance scans.
Prior to this he held the same positions from 1991 to 2000 at the Washington
University School of Medicine in St. Louis. He received a Bachelor of Arts
degree from Pacific Union College in Angwin, CA; his M.D. from Loma Linda
University, Loma Linda, CA; and was a Rotating Intern at the Los Angeles
County-USC Medical Center, Los Angeles, CA. Dr. Kido has more than 30 university
and hospital appointments, and has chaired and served on several committees. He
has received in excess of $7 million for more than 25 different Grants. He is a
Fellow in American College of Radiology and is Certified by the American Board
of Radiology. Editorially, he reviews or edits 8 prestigious medical journals.
Professionally, Dr. Kido is a member of the Radiological Society of North
America, Association of University Radiologists, American College of Radiology,
American Society of Neuroradiology, Society of Magnetic Resonance, Society of
Medical Decision Making, and the American Medical Association. He has published
85 Articles in Peer Reviewed Journals, submitted 2 Articles for publication to
Science Reports, authored or coauthored 12 books and/or chapters, arranged more
than 15 Scientific Exhibits at the Annual Meetings of various medical
Associations and Societies, authored or coauthored 89 Abstracts for numerous
medical organizations and universities, has 32 Major Invited Professorships and
Lectureships ranging from the Harvard Medical School and other Universities to
Sterling-Winthrop and other organizations, and conducted 76 Presentations to
countless numbers of medical Associations and Societies.
ARDIE R. NICKEL currently serves as Secretary, and as the Director of
Scientific and Medical Development for the company and has been involved in the
founding of the company since 2000. From late 1997 to late 1999 Mr. Nickel was
the Chairman of the Board and CEO of Radiation Centers of America, Inc. and its
subsidiaries and has been active in business development for several major
products in the medical diagnostic imaging field. From 1996 to early 1998 he
served as a consultant in diagnostic imaging development for Bracco Diagnostic,
Inc., New Jersey. Mr. Nickel received his Bachelor of Science degree in 1958 in
Radiologic Science from St. Louis University in St. Louis, Missouri.
ARTHUR T. PORTER, M.D., M.B.A. has served as the President and CEO of the
Detroit Medical Centers from May 1999 to the present time, a $1.6 billion health
system with more than 14,000 employees, 3,000 physician organizations, eight
hospitals, 100 ambulatory sites and a health plan; all of which were losing $100
million annually when he took over, but was brought within budget in less than 2
years. From 1991 to 1999 he was Radiation Oncologist-in-Chief at the Detroit
Medical Center, President and CEO of Radiation Oncology Research and Development
Center, and Chief of the Gershenson Radiation Oncology Center at Harper
Hospital. After attending the University of Sierra Leone, he transferred to
Cambridge University in England, where he received his B.A. in anatomy, M.A. in
natural sciences and his Medical Degree. Dr. Porter earned his M.B.A. from the
University of Tennessee and Certificates in Medical Management from Harvard
University and the University of Toronto. He is President of University
Radiation Oncology Physicians, P.C.; was the Director of Clinical Care at the
Karmanos Cancer Institute from 1995-98; Chairman of Radiation Oncology at Grace
Hospital from 1993-99; Physician in Chief and President of DMC Crittenton Health
Services from 1996-99; and led the departments of radiation oncology at Victoria
Hospital Corporation and London Regional Cancer Center in Ontario. He received
Certifications as Diplomate in Medical Oncology and Radiotherapy from the Royal
College of Radiologists in England, Specialist in Radiation Oncology from the
Royal College of Physicians and Surgeons in Canada, and Diplomate in Health Care
Administration from the American Academy of Medicine Administrators. His name
has been included in the Best Doctors in America for the past 10 years,
Physicians Recognition Award of the American Medical Association, Best Doctors
in the Midwest, Who's Who in Science and Technology, Who's Who in Medicine,
Who's Who in America, Marquis Who's Who, International Who's Who in Medicine,
Life Fellow of the International Biographical Association, Commendation of the
City of Detroit, Commendation of Wayne County, Commendation of the State of
Michigan, and Michigander of the Year. He is a member the Royal College of
Radiologists (England), European Society for Therapeutic Radiation Oncology,
American Medical Association, National Cancer Institute, and American Hospital
Association. Dr. Porter was president of the American Brachytherapy Society,
American Cancer Society, American College of Oncology Administrators, and
President and Chairman of the Board of Chancellors of the American College of
Radiation Oncology; and is currently on the Board of Scientific Counselors of
the National Cancer Institute (USA). He is a Fellow of the Royal Society of
Medicine, Royal College of Physicians & Surgeons of Canada, American College of
Angiology, Detroit Academy of Medicine, American Academy of Medical
Administrators, American College of Radiation Oncology, and the American College
of Radiology. Dr. Porter is on the Editorial Board of 14 scientific journals and
has to his credit more than 300 scholarly works in peer-reviewed journals,
chapters in books and in proceedings of conferences, and has received numerous
awards from several organizations. He has received almost $4 million for several
Grants. In September 2001, President G. W. Bush appointed Dr. Porter to a
Presidential commission to review the health care provided by the Department of
Defense and the V.A. organizations. In December 2001 Mayor-Elect Kilpatrick
appointed Dr. Porter to his transition team and to chair his health care task
force.
SUSAN F. REYNOLDS, M.D., Ph.D. has served as the Managing Partner of the
Los Angeles based Executive Search firm, Susan Reynolds and Associates, from
1998 to the present time, catering to the medical industry by providing
leadership and management consulting, along with executive coaching and career
transition counseling. From 1993 to 1998 she was a keynote speaker on health
care reform for the Nationwide Speakers' Bureau; President of Health Care Reform
Consultants, preparing a presidential briefing book for the president called
"Building a Healthy America", which outlined an alternate strategy for national
health care reform; founded and led the Physician Executive Practice at Heidrick
& Struggles, and was a Managing Director for Russell Reynolds Associates. She
graduated Valedictorian and Magna Cum Laude from Springside School in
Philadelphia and graduated from Vassar College in Poughkeepsie, NY with an A.B.,
Cum Laude Generali et Cum Laude in Materia Subjecta, in Chemistry with a
Distinction in Biochemistry. Her education was furthered at the UCLA Medical
Center in Los Angeles, CA, where she received a Ph.D. in Biological Chemistry
and an M.D.; completed her Internship in Internal Medicine and Residency in
Internal Medicine with specialization in Critical Care Medicine, followed by a
Fellowship in Cardiology with specialization in Critical Care Medicine and
Administrative Medicine. Dr. Reynolds was appointed by the President to serve on
the Transition Team Task Group on Health Care Delivery and created the "Smart"
Card.
From 1994 to 1998 she was academically appointed to the UCLA School of
Medicine, Assistant Clinical Professor, Department of Internal Medicine,
Emergency Medicine Division. She received Honors such as the Woman of the Year,
California's 44th Assembly District; American Medical Women's Association,
Community Service Award for California; Distinguished Alumna, Springside School,
Philadelphia; Malibu Times Citizen of the Year; Los Angeles County Distinguished
Service Award; Distinguished Citizen Award, County of Los Angeles for founding
the Malibu Emergency Room; Emil Bogen Research Prize, UCLA School of Medicine;
and Phi Beta Kappa, Vassar College. She is a member of the board of directors of
the Academy for Guided Imagery, American Medical Women's Association, California
Medical Association, Los Angeles County Medical Association, California Chapter
of the American College of Emergency Physicians, and has been a member of the
board of directors of A Call to Serve (ACTS) International, the Los Angeles
Pediatric and Family Medical Center, American College of Emergency Physicians,
President of the American Association of Women Emergency Physicians, California
State Director and Western Regional Governor of the American Medical Women's
Association, President of the Malibu Chamber of Commerce, and President of the
Malibu Rotary Club. She is licensed as a Diplomate, American Board of Internal
Medicine. Dr. Reynolds has given more than 45 Public Speaking Engagements,
produced 7 large organized conferences in which she participated as a speaker,
and has authored and coauthored at least 20 Referenced Publications. Her soon to
be published book is entitled "Leading From Inside-Out: A Mind-Body-Spirit
Approach to Leadership Development and Organizational Transformation, which may
be formatted into a PBS special later this year.
WILLIAM J. WALKER, JR., Ph.D. has been the President and CEO of
comprehensive Physics and Regulatory Services, Ltd. from 1995 to the present
time, overseeing a staff of 18 professional medical physicists, dosimetrists and
service personnel, and is responsible for corporate programs to provide quality
medical radiation therapy physics and state-of-the-art treatment planning
services to over 20 free-standing radiation therapy centers located in eastern
United States, treating around 450 cancer patients daily. He was the Director of
Physics for EquiMed, Inc. administering the Radiological Physics, Regulatory
Affairs, Radiation Safety and National Service programs from 1994 to 1998; and
served as a consultant to the U.S. Nuclear Regulatory Commission in Washington,
D.C., a senior consultant to the Institute for Radiological Imaging Sciences in
Germantown, MD, and Consulting Radiological Physicist to Sacred Heart Hospital
in Allentown, PA. Professionally, he served as the Secretary/Treasurer, then
President of the Mid-Atlantic Chapter of the American Association of Physicists
in Medicine; on the Certification Exam Panel of the American Board of Health
Physics; is a Member of the Visiting Committee for the Department of Nuclear and
Radiological Engineering at the University of Florida; and has served on several
Committees of the American College of Nuclear Physicians, including the Nuclear
Medicine Science Committee, the Standardization of Nuclear Medicine
Instrumentation Committee, Government Affairs Committee, Equipment
Specifications and Performance Committee, and Subcommittee on Nuclear Medicine
Technology. He is a member of the Health Physics Society, American Association
of Physicists in Medicine, Society of Sigma XI, Lions Club International, and
was Chairman of the board of directors of the Profound Paralysis Foundation.
Doctor Walker received his Ph.D. in Radiological Physics from the University of
Florida, his Master of Science in Radiation Biophysics from the University of
Kansas, and a Bachelor of Science in Civil Engineering from the Virginia
Military Institute. He is a Certified Health Physicist from the American Board
of Health Physics, a Registered Professional Civil and Sanitary Engineer, a
Licensed Therapeutic Radiological Physicist in the State of Florida, a Qualified
Expert for Diagnostic and Therapeutically X-ray Inspection in the State of
Virginia, and a Qualified Expert as a Radiation Machine Inspector in the State
of Maryland. To his credit, he has authored and coauthored 18 publications.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers and directors and persons who own more than 10%
of a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission (hereinafter referred to as the "Commission")
initial statements of beneficial ownership, reports of changes in ownership and
annual reports concerning their ownership, of Common Stock and other equity
securities of the Company on Forms 3, 4, and 5, respectively. Executive
officers, directors and greater than 10% shareholders are required by commission
regulations to furnish the Company with copies of all Section 16(a) reports they
file. To the Company's knowledge, all officers and directors comprising all of
the Company's executive officers, directors and greater than 10% beneficial
owners of its common stock, have complied with Section 16(a) filing requirements
applicable to them.
Item 10. Executive Compensation
<TABLE>
<CAPTION>
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SUMMARY COMPENSATION TABLE
-----------------------------------------------------------------------------
Annual Compensation
-------------------------------
(a) (b) (c) (d) (e) (f) (g)
Name and
Principal Salary Bonus Shares Issued Warrants Warrants
Position Year ($) ($) at $ .001 Issued Exercised
K. Hankin 2004 52,400 0 1,500,000 0 0
CEO
A. Nickel 2004 6,000 0 125,000 0 0
Secretary
All other
directors as
a group 2004 0 0 150,000 37,778 0
Item 11. Security Ownership of Certain Beneficial Owners
and Management and Related Stockholders Matters.
The following table sets forth information, to the best knowledge of the
Company as of December 31, 2004, with respect to each person known by the
Company to own beneficially more than 5% of the Company's outstanding common
stock, each director of the Company and all directors and officers of the
Company as a group.
NAME AND ADDRESS Position AMOUNT AND NATURE OF PERCENT OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OWNERSHIP
Edward R. Annis, M.D. Director 41,667 common 0.9%
422 N. E. 93rd Street
Miami Shores, FL 33138
E. Mark Haacke, Ph.D. Director 35,000 common 0.8%
609 Winchester Crescent
Sarnia, Ontario N7S 4R1
Kenneth N. Hankin Director
14614 S.W. 174 Terrace /Officer *1,500,000 common 33.5%
Miami, FL 33177
Daniel K. Kido, M.D. Director 36,111 common 0.8%
6176 Canyon Estates Court
Riverside, CA 92506
Ardie R. Nickel Director
1660 N. W. 94 Avenue /Officer 125,000 common 2.8%
Plantation, FL 33322
Arthur T. Porter, MD MBA Director 25,000 common 0.5%
12251 Jacoby Road
Milford, MI 48380
Susan F. Reynolds, MD PhD Director 25,000 common 0.5%
652 Jacon Way
Pacific Palisades, CA 90272
William J. Walker, Jr PhD Director 25,000 common 0.5%
11928 Ropp Lane
Lovettsville, VA 20180
All Directors and Executive
Officers as a Group (8 people) 1,812,778 common 40.5%
*Includes shares owned by spouse
Item 13. Exhibits and Reports on Form 8-K
<TABLE>
<CAPTION>
Exhibit No. Exhibit Name
<S> <C>
3(i).1 Articles of Incorporation filed December 26, 2001
(Incorporated by reference to Exhibit 3(i).1 of
Form SB-2 filed August 8, 2003)
3(ii).1 By-laws
(Incorporated by reference to Exhibit 3(ii).1 of
Form SB-2 filed August 8, 2003)
3(iii) Articles of amendment as filed with the State
(Incorporated by reference to Exhibit 3(iii) of
Form SB-2 filed August 8, 2003)
3(iv) Certification of articles of incorporation
(Incorporated by reference to Exhibit 3(iv) of
Form SB-2 filed August 8, 2003)
3(v) Certificate of good standing
(Incorporated by reference to Exhibit 3(iv) of
Form SB-2 filed August 8, 2003)
3(vi)1. to 5 Resolutions
(Incorporated by reference to Exhibit 3(vi.1 to vi.5
of Form SB-2 filed August 8, 2003)
10.1 Warrant to purchase
(Incorporated by reference to Exhibit 10.1
of Form SB-2 filed August 8, 2003)
10.2 Consulting agreement - Townsen & Associates
(Incorporated by reference to Exhibit 10.2
of Form SB-2 filed August 8, 2003)
10.3 Stock Valuation Report
(Incorporated by reference to Exhibit 10.3
of Form SB-2 filed August 8, 2003)
10.4 Updated letter of Stock Valuation
(Incorporated by reference to Exhibit 10.4
of Form SB-2 filed August 8, 2003)
10.5 Letter from Universal to Oppenheim
(Incorporated by reference to Exhibit 10.4
of Form SB-2 filed August 8, 2003)
11 Computation of earnings – statement of operations
21 Subsidiaries
23.1 Consent of independent accountants
23.2 Consent by Oppenhiemer & Ostrick
(Incorporated by reference to Exhibit 10.4
of Form SB-2 filed August 8, 2003)
31.1 Certification
32 Certification pursuant to 18 U.S.C. Section 1350
47.
<PAGE>
Item 13(b) Reports on Form 8-K
Incorporated by reference the Company filed a Form
8-K on August 1, 2003 in connection with the change
of address.
Incorporated by reference the Company filed an
8-K on December 30, 2003 as amended on February 5,
2004 in connection with acquisition of a cancer care
center and the change in year-end.
Incorporated by reference the Company filed an 8-K
on February 5, 2004 in connection with a lawsuit
launched by the Company against Mirador Consulting.
Incorporated by reference the Company filed an 8-K
on November 17, 2004 in connection with the change
of address of the Company.
Item 14. Principal Accountant Fees and Services
(a) Audit Fees.
The Company's principal accountants billed for audit and accounting
services rendered for the years ended December 31, 2004 and December 31,
2003, $ 6,000 and $ 5,000 respectively.
There were no other fees charged nor any other services performed on behalf
of the Company by its principal accountants.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
UNIVERSAL HEALTHCARE MANAGEMENT SYSTEMS, INC.
By: s/s Kenneth Hankin
------------------------
Kenneth Hankin, President
& CEO
March 31, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
By: s/s Kenneth Hankin
-----------------------
Kenneth Hankin, President, CEO & Director March 31, 2005
By: s/s Ardie Nickel
-----------------------
Ardie Nickel, Secretary & Director March 31, 2005
EXHIBIT 11
Computation of earnings - see statement of operations
EXHIBIT 21
Subsidiaries of the Registrant
The following non-operating subsidiaries are 100% owned by the Registrant
Oncology Care and Wellness Center, Inc,
Universal Holding & Development Inc.
EXHIBIT 23.1
Independent Auditors' Consent
The Board of Directors
Universal Healthcare Management Systems Inc.
We consent to the incorporation on Form 10KSB with respect to our report
dated March , 2005 the consolidated balance sheets of Universal Healthcare
Management Systems Inc. and subsidiaries as of December 31, 2004 and December
31, 2003, and the related consolidated statements of operations,
shareholders' equity and cash flows for the year ended December 31, 2004, and
the six months ended December 31, 2003, and for the period September 24,
2001(inception) to December 31, 2004.
Micheal Johnson & Company LLP
Denver Colorado
March 31, 2005
EXHIBIT 31.1
CERTIFICATION
I, Kenneth N. Hankin, certify that:
1. I have reviewed this annual report on Form 10-KSB of Universal
Healthcare Management Systems, Inc.
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for
the registrant and have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
c) Disclosed in this report any changes in the registrant's internal
control over financial reporting that occurred during the registrant's most
recent fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.
5. I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent functions):
a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: March 31, 2005
/s/ Kenneth N. Hankin
-----------------------------
Name: Kenneth N. Hankin
Title: President and Chief Executive Officer
EXHIBIT 32.1
CERTIFICATE PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and in connection
with the Annual Report on Form 10-KSB of Universal Healthcare Management
Systems, Inc. (the "Corporation") for the year ended December 31, 2004, as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), the undersigned, the President and Chief Executive Officer of the
Corporation certifies that:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operation of the
Corporation.
/s/ Kenneth N. Hankin
-------------------------------
Kenneth N. Hankin
President and Chief Executive Officer
March 31, 2005