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AUCTIONANYTHING.COM, INC.
TO OUR SHAREHOLDERS:
This information statement is being provided to the shareholders of
AuctionAnything.com, Inc. Our Board of Directors has approved and recommended an
amendment to our Certificate of Incorporation increasing the number of
authorized shares of Common Stock from 50,000,000 shares to 100,000,000 shares,
and creating a class of Preferred Stock consisting of 1,000,000 shares.
As a matter of regulatory compliance we are sending you this
Information Statement which describes the purpose and effect of the
aforedescribed amendments.
Please feel free to call us at 407-481-2140 should you have any
questions on the enclosed Information Statement. We thank you for your continued
interest in the AuctionAnything.com.
For the Board of Directors of
AUCTIONANYTHING.COM, INC.
/s/ Dr. Wayne Goldstein
------------------------------
Dr. Wayne Goldstein, President
AUCTIONANYTHING.COM, INC.
35 West Pine Street
Suite 211
Orlando, Florida 32801
INFORMATION STATEMENT
General Information for Stockholders
This Information Statement is furnished to the holders of Common Stock
of AuctionAnything.com, Inc., a Delaware corporation, in order to comply with
the requirements of Section 14(c) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and Regulation 14C under the Exchange Act. On May
, 2001, our Board of Directors approved and recommended that the Certificate of
Incorporation be amended in order to increase the number of authorized shares of
Common Stock from 50,000,000 shares to 100,000,000 shares and create a class of
preferred stock, par value $.001 per share ("Preferred Stock") issuable in such
series, and with such designations, rights and preferences as our Board of
Directors may determine from time to time in their discretion.
The proposed amendment to our Certificate of Incorporation will become
effective upon the filing with us of the written consent of the holders of not
less than a majority in interest of our outstanding Common Stock and the filing
of the Certificate of Amendment to the Certificate of Incorporation with the
Secretary of State of Delaware and subject to the provisions of the Exchange
Act. We anticipate that the filing of the written consent will occur on or about
June , 2001.
Vote Required
If the proposed amendment to our Certificate of Incorporation was not
adopted by written consent, it would have required to be considered by our
shareholders at a special shareholders' meeting convened for the specific
purpose of approving the amendment. The elimination of the need for a special
meeting of shareholders to approve the amendment is made possible by Section 228
of the Delaware General Corporation Law (the "Delaware Act") which provides that
the written consent of the holders of outstanding shares of voting capital stock
having not less than the minimum number of votes which would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted may be substituted for such a special meeting.
The affirmative vote of a majority of our shareholders is necessary to amend the
our Certificate of Incorporation. In order to eliminate the costs and management
time involved in holding a special meeting, we have elected to utilize the
written consent of the holders of a majority of our issued and outstanding
Common Stock, our only class of voting securities. As discussed hereinafter, our
Board of Directors has recommended the amendment to our Certificate of
Incorporation in order to permit us to fulfill the terms of the Disease SI
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Agreement discussed later in this Information Statement, and to provide
additional shares of Common Stock and a class of Preferred Stock for future use.
Dr. Wayne Goldstein and Messrs. Brian S. John, Martin Meads and John
Hotaling, officers and/or directors of AuctionAnything.com who own in the
aggregate 36,190,832 shares of our Common Stock representing approximately 86.2%
of our outstanding Common Stock entitled to vote on the proposal to amend our
Certificate of Incorporation have indicated that they intend to give their
written consent to the amendment to our Certificate of Incorporation described
in this Information Statement. The written consent of such persons to the
amendment to our Certificate of Incorporation will become effective upon the
filing of their written consents with our Secretary. We anticipate that the
filing of such written consents will occur on or before June , 2001, following
which we will prepare and file a Certificate of Amendment to our Certificate of
Incorporation with the State of Delaware effecting the recapitalization
described herein. A copy of the proposed Certificate of Amendment to the
Certificate of Incorporation is set forth as Exhibit A to this Information
Statement. The date on which this Information Statement was first sent to
shareholders is on or about June , 2001. The record date established by us for
purposes of determining the number of outstanding shares of our Common Stock is
June , 2001 (the "Record Date"). The effective date of the recapitalization of
AuctionAnything.com is anticipated to be June , 2001.
Pursuant to Delaware Act, we are required to provide prompt notice of
the taking of the corporate action without a meeting to the shareholders of
record who have not consented in writing to such action. Inasmuch as we will
have provided this Information Statement to our shareholders of record on the
Record Date, no additional action will be undertaken pursuant to such written
consents, and no dissenters' rights under the Delaware Act are afforded to our
shareholders as a result of the adoption of the Certificate of Amendment to our
Certificate of Incorporation.
EXECUTIVE OFFICES
Our principal executive offices are located at 35 West Pine Street,
Suite 211, Orlando, Florida 32801. Its telephone number is (407) 481-2140.
OUTSTANDING VOTING STOCK OF AUCTIONANYTHING.COM
On the Record Date there were 41,978,306 shares of Common Stock issued
and outstanding. The Common Stock constitutes our sole class of voting
securities. Each share of Common Stock entitles the holder thereof to one vote
on all matters submitted to shareholders.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth the Common Stock ownership information
as of the Record Date, with respect to (i) each person known to us to be the
beneficial owner of more than 5% of our Common Stock; (ii) each director; and
(iii) all directors and executive officers as a group. Beneficial ownership is
determined in accordance with the rules of the SEC, and generally includes
voting or investment power with respect to securities and includes any
securities which the person has the right to acquire within 60 days of May ,
2001, 2001 through the conversion or exercise of any security or other right.
Unless otherwise indicated, the business address of each person listed is 35
West Pine Street, Suite 211, Orlando, Florida 32801.
Shares Beneficially
Name of Owned
Beneficial Owner Number Percent
Dr. Wayne Goldstein 12,372,087(1) 29.5%
Brian S. John 8,837,297(2) 21.1%
Raymond J. Hotaling 7,921,694 18.9%
Martin M. Meads 7,059,745 16.8%
All officers and directors
as a group (four persons)(1)(2) 36,190,823 86.2%
(1) Excludes 22,627,913 shares of our Common Stock which we will issue to Dr.
Goldstein following the recapitalization of AuctionAnything.com described in
this Information Statement. We are obligated to issue these additional shares to
him under the terms of the Disease SI Agreement.
(2) Excludes 16,162,703 shares of our Common Stock which we will issue to Mr.
John following the recapitalization of AuctionAnything.com described in this
Information Statement. We are obligated to issue these additional shares to him
under the terms of the Disease SI Agreement.
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
Introduction
Our authorized capitalization as set forth in our Certificate of
Incorporation, as previously amended, is 50,000,000 shares of Common Stock.
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We propose to increase our authorized capitalization to 100,000,000
shares of Common Stock and to create a class of Preferred Stock, consisting of
1,000,000 shares, which will be issuable in such series, and with such
designations, rights and preferences as our Board of Directors may determine
from time to time. The par value of the Common Stock will remain at $.001 per
share, and the par value of the Preferred Stock be $.001 per share. On May ___,
2001, our Board of Directors adopted a resolution authorizing the increase in
the authorized capitalization and to create a class of preferred stock through
an amendment to our Certificate of Incorporation as described above.
Reasons for Amendment
The Board of Directors has recommended the amendment to our Certificate
of Incorporation for a number of reasons including, but not limited to,
facilitating our ability to effect growth through future acquisitions, capital
raising, other business combinations and issuances under our stock option plan.
Acquisition of Disease S.I.
As previously disclosed in our public filings, our inability to
generate positive cash flow forced us to purse all possible financing
alternatives, including our sale, a merger or a reverse merger. On May 23, 2001
we executed an Agreement and Plan of Reorganization and Stock Purchase Agreement
(the "Disease SI Agreement") with Disease S.I., Inc., a Florida corporation
("Disease SI") and its shareholders Dr. Wayne Goldstein and Mr. Brian S. John.
Under the terms of the Disease SI Agreement, we acquired 100% of the issued and
outstanding stock of Disease SI in exchange for 60,000,000 shares of our Common
Stock. We issued Dr. Goldstein and Mr. John a total of 21,209,384 shares at the
closing, and agreed that the balance of 38,790,616 shares will be delivered to
them as soon as we amend our Certificate of Incorporation to increase our
authorized Common Stock in order to permit such issuance as described herein.
Giving effect to the recapitalization, we will have a total of 80,768,922 shares
of our Common Stock issued and outstanding, of which 74.3% will be owned by Dr.
Goldstein and Mr. John.
Concurrent with the closing of the Disease SI Agreement, Messrs Martin
Meads and John Hotaling, who had been our executive officers, resigned their
positions as officers but have remained directors of AuctionAnything.com and
officers of North Orlando Sports Promotions, Inc., our wholly-owned subsidiary.
Dr. Goldstein and Mr. John were appointed the officers and directors of
AuctionAnything.com. The consummation of the transaction with Disease SI has
resulted in a change in control of AuctionAnything.com.
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About Disease SI
Introduction
Disease SI is a developmental stage biopharmaceutical/clinical
diagnostics company. Disease SI's long-term goal is to become a partially
integrated pharmaceutical company with capabilities in research, drug
development, clinical investigation, and regulatory affairs. Disease SI is
planning to employ a broad array of technologies to detect, identify and
quantify substances in blood or other bodily fluids and tissues. The company
intends to target and develop proprietary pharmaceutical compounds and new
technologies. Its primary goal will be to develop a Transmissible Spongiform
Encephalopathy ("TSE") test, useful in the diagnosis of TSE diseases such as
scrapie in sheep, Bovine Spongiform Encephalopathy (BSE) in cattle (commonly
known as "mad-cow disease"), Chronic Wasting Disease (CWD) in wild deer and elk
and Creutzfeldt-Jakob Disease (CJD) in humans. Disease SI believes these test
results may be used in the diagnosis, detection, evaluation, monitoring and
potential treatment of diseases and other medical conditions.
Disease SI's overall plan of operation includes:
* identifying, acquiring and exploiting rights to new technologies
and compounds relating to BSE, CJD and other neurological
disorders;
* enhancing the value of those assets through further research and
clinical testing;
* performing clinical studies towards regulatory approval and
attempt to market its drugs through licensing agreements with
pharmaceutical companies; and
* working to develop other promising compounds in-house and in
collaboration with third parties.
In its implementation of its plan of operation, Disease SI's principal
activities will include:
* researching and developing technologies for TSE screening;
* conducting clinical studies to validate its TSE screening tests;
* negotiating licenses for intellectual property of others
incorporated into its technologies;
* developing relationships with leaders in the scientific and
medical communities;
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* conducting market studies and analyzing potential approaches for
commercializing technologies which may develop;
* hiring research and clinical personnel;
* hiring management and other support personnel; and
* raising capital.
Disease SI' s goal is to eventually offer TSE screening services to
establish the market. It will then seek to license its technologies to leading
clinical reference laboratories to enable them to develop tests. Disease SI may
also choose to package its technologies and seek approval for diagnostic test
kits with which any clinical laboratory could conduct its tests.
Currently Disease SI does not maintain any research or laboratory
premises, but plans to utilize such facilities on a contractual or collaborative
basis at academic and research institutions, as well as contract research
organizations. Considering the commercialization infrastructure necessary to
effectively market its target drug products, Disease SI will seek joint ventures
or collaborations with universities, pharmaceutical companies, both domestically
and outside the United States. It will also seek universities as well as
corporate partners, who will be responsible for at least part of the clinical
development, regulatory approval, manufacturing and marketing of the drug
product. Under such an arrangement, Disease SI expects to receive certain
up-front and sub-licensing fees, ongoing research contracts, milestone payments,
and royalties on drug product sales. Disease SI maintains a website at
www.diseasesciences.com.
History of Disease SI
Disease SI has no operating history and it has not generated any
revenues to date. It was incorporated in April 2001 and has conducted limited
business operations since inception as a result of its limited cash and assets.
We do not expect operating revenue from Disease SI in the foreseeable future. We
expect Disease SI to generate losses resulting principally from costs incurred
in conjunction with its research and development initiatives. These research and
development expenses will include costs related to scientific and laboratory
personnel, clinical studies and reagents and supplies used in the development of
its technologies. We expect that the cost of its research and development
activities will increase substantially as Disease SI continues activities
relating to the development of a TSE screening test, and the extension of its
technologies to several other forms of TSE. Disease SI is planning clinical
studies, the costs of which will be borne by it. We are unable at this time to
project the costs of these clinical studies due to the early stage of Disease
SI's development. We also expect general and administrative expenses for Disease
SI to increase significantly as its hires additional personnel and builds its
infrastructure to support future projected growth. These general and
administrative expenses are expected to consist primarily of non-research
personnel salaries, office expenses and professional fees.
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Product Research and Development
Disease SI intends to conduct extensive product research and
development activities, and these research and development activities are
expected to play a major role in its projected future growth. In conjunction
with the implementation of its plan of operation, Disease SI will hire and
establish research teams. These research teams will attempt to develop new
technology and new applications for existing technology. In its development and
testing, Disease SI also intends to consult with scientific and medical
professionals at universities, hospitals and medical schools. Despite the fact
that there can be no assurance that the technologies and/or pharmaceutical
compounds that Disease SI may develop will ultimately prove to be profitable, we
anticipate that we will spend the necessary capital on research and development
in the foreseeable future in order to enhance pharmaceutical properties, and to
develop new potential products. We are unable at this time to estimate the total
amount which will be spent on research and development by Disease SI.
About Prions And Prion Diseases
Prions (pronounced "pree-ons") are infectious proteins that are the
causative agents of spongiform encephalopathies. Prions consist of a single
molecule containing about 250 amino acids termed the PrP protein. Prions are
unique in that they that break many rules of biology. Most life forms such as
viruses, bacteria, plants and humans pass down their blueprints for all their
progeny via their deoxyribonucleic acid (DNA). Generally, in nature the process
for converting the blueprints into building blocks must involve replication of
DNA, transcription of the message into ribonucleic acid (RNA) and translation of
the RNA's message to form proteins, the building blocks of cells, tissues,
organs and whole organisms. Prions differ in that they contain no DNA or RNA.
With prions, we have life forms where abnormal proteins direct the refolding of
normal proteins just by direct contact. The difference between the normal and
abnormal proteins does not lie in their primary structure (the sequence of their
amino acids), but rather in their folding. Prion infected proteins are folded
into abnormal shapes in a way that allows them to resist normal protease
degradation which over time leads to the build up of aggregates of the abnormal
protein, especially in neurons in the brain.
Prions are also unique in that are not destroyed by the usual means to
kill infectious agents. They are resistant to boiling at temperatures as high as
250 degrees Celsius (over 400 degrees Fahrenheit). They are also resistant to
ionizing radiation. Additionally, prion related diseases are also extremely
difficult to diagnose. Currently, there is no blood test for TSE, and infected
animals do not mount any immune response to the infection and signs of diseases
like BSE, are often only possible to diagnose at autopsy.
Prion diseases are progressive degenerative disorders of the central
nervous system. In cattle, the latency (incubation period) for mad cow disease
is roughly five years, meaning that cows have the disease for five years before
symptoms begin to appear. No one knows the latency period for CJD in humans, but
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it is estimated at 10 years. Because of this uncertainty, as was with AIDS, no
one is sure how many people in England already have contracted the disease but
are not yet showing symptoms.
History Of Transmissible Spongiform Encephalopathies (TSE) and Scrapie
The history of Transmissible Spongiform Encephalopies (TSE) can be
traced back to England in the mid-1700s in the form of a disorder called
"scrapie" found mostly in sheep and goats. Originally thought to be a genetic
disease, scrapie was believed to be inherent in poorly breed animals. This
belief continued through the 1930s when French researchers proved that it was
not transferred genetically, but in fact was infectious. American scientists
later discovered that they were able to transmit scrapie from sheep to cows by
injecting infectious material into their brains.
In England, at times scrapie had become quite prevalent. Over the past
couple of centuries it was believed that at one time or another as many as
one-third of British sheep had been infected with the disease. The disease
secured its first known foothold in the United States in 1947, when an outbreak,
traced to an import of purebred Suffolk sheep, was reported in Michigan. In
1952, when scrapie outbreaks were reported in California and Ohio, the United
States Department of Agriculture (USDA) launched the first of two eradication
programs, requiring the slaughter of entire herds infected with even a single
case of scrapie. Farmers and sheep herders concerned with protecting their
financial interests became reluctant to report suspected cases, and scrapie was
"driven underground." From the mid-1950s through the mid-1970s a few flocks
yearly in the U.S. were reported infected, numbers that the USDA felt were too
small to be credible. To combat scrapie secrecy, in 1978 the USDA instituted the
Scrapie-Eradication Program, a program of reimbursing farmers two thirds of the
appraised value, up to $300 per animal, of the sheep sacrificed in their entire
flocks suspected of carrying scrapie. In 1983 it was decided that the revised
USDA policy for farmers would be to kill (and would be reimbursed for) only
infected sheep and their immediate relatives not their entire flocks. Upon
revision of the USDA policy, reports of scrapie increased. In 1992, for a
combination of scientific and budgetary reasons, the Scrapie-Eradication Program
was dismantled. In 1992, farmers were given six months to report sick sheep for
reimbursement, and then the program officially closed. In the U.S. today, a
voluntary system is in place under which farmers can apply to have their sheep
certified "scrapie-free".
Scrapie is important because it is believed that it is the origin of
Bovine Spongiform Encephalopathy (BSE), or mad-cow disease. It is widely
believed that scrapie jumped species when farmers began feeding infected sheep
to cattle as a means of providing the cattle with a cheap form of protein.
Bovine Spongiform Encephalopathy (BSE)
Bovine Spongiform Encephalopathy (BSE), a prion disease also known as
mad-cow disease, is a progressive, lethal central nervous system disease which
targets cattle. BSE is characterized by the appearance of vacuoles, or clear
holes, in neurons in the brains of affected cattle that give the brain the
appearance of a sponge or spongiform. BSE was initially recognized in cattle in
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the United Kingdom in 1986. After its discovery, research led scientists to the
conclusion that the bovine agent had originated from a scrapie agent, which has
been present within sheep in the United Kingdom for over 200 years. It is
presumed that the scrapie agent jumped species and moved into cattle when sheep
offal (the leftover parts of butchered animals) were ground down and included as
a protein supplement in cattle feed. As cattle that had ingested the diseased
scrapie began to die, cattle carcasses and offal were then themselves ground
down and used as a protein supplement for future cattle feed. In essence, the
epidemic of mad-cow disease was caused by an innovation of feeding dead cows to
live cows. Cows and sheep are, by nature, herbivores (vegetarians). Further
research has concluded that mad-cow disease was transmitted through such feed,
and especially through certain tissues of the offal including the brain, spinal
cord, eyes, spleen and certain nerve tissues.
BSE in cattle in Europe had reached epidemic proportions by 1992 more
than 1,000 cases were being reported. Between 1987 and 2000 over 180,000 cattle
were identified as having BSE with countries including UK, Ireland, Portugal,
France and Switzerland.
Chronic Wasting Disease (CWD)
Chronic wasting disease, another TSE, was diagnosed more than a decade
ago in mule deer and elk in Colorado and Wyoming. Since 1981, CWD has been
spreading slowly among wild deer and elk herds in the Rocky Mountains, and now
afflicts between 4% and 8% of 62,000 deer in the region between Fort Collins,
Colorado and Cheyenne, Wyoming.
During 1999, CWD erupted among a herd of elk on a farm near
Philipsburg, Montana which raised elk commercially. A few of the elk which had
been shipped by the farm to other destinations in the United States were
subsequently discovered to be infected with CWD. Montana health authorities
slaughtered 81 elk on the farm, and initially announced plans to incinerate the
carcasses. Upon determination that incineration would be too expensive, the
animals, together with the equipment used to feed, water and care for the
animals, were buried at a landfill. Montana authorities announced that the fence
line at the elk farm would be decontaminated, but they did not say what
procedure they would use, nor did they announce what would become of the
contaminated land. The disease agent that causes CWD - a prion protein - is very
hardy and resists destruction by traditional sterilization techniques like
alcohol and heat.
In northeastern Colorado and southeastern Wyoming, state officials are
urging hunters to protect themselves when dressing wild deer and elk which they
have shot. Hunters should wear rubber gloves, minimize contact with brain and
spinal cord tissues, discard the brain, spinal cord, eyes, spleen and lymph
nodes and refrain from eating any of these organs. Although there is no evidence
that CWD can cross over from deer and elk to humans, because there was
previously no firm evidence that mad cow disease could afflict humans until
1999, wildlife officials in the Rocky Mountains states believe caution is
warranted.
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Creutzfeldt-Jakob Disease (CJD)
BSE in humans is referred to Creutzfeldt-Jakob Disease. In its natural
form, CJD was first described in the 1920s by German physicians Has Gerhard
Creutzfeldt and Alfons Jakob. Symptoms vary, but may include loss of
coordination, personality changes, mania and dementia. In the United States
approximately 250 cases are diagnosed each year. Confirming a diagnosis of CJD
has historically been difficult as traditional laboratory tests have been
ineffective in detecting CJD. The disease does not induce a fever or other
systemic manifestations. Accordingly, a definitive diagnosis of CJD has
traditionally required a brain biopsy or autopsy which can detect the
characteristic changes in the brain tissue caused by the disease. Moreover, a
brain biopsy may sometimes produce a false-negative result if the biopsied area
was unaffected by the disease. The difficulties involved in diagnosing CJD may
have prevented the identification of the disease in some cases. Because brain
biopsy for diagnosing CJD is invasive, costly and risky, it is often not
performed. Additionally, some physicians may not consider the possibility of a
CJD diagnosis since the disease is deemed to be rare and the clinical symptoms
of CJD can often be attributed to other ailments. Consequently, CJD may be
mistaken for a variety of psychological illnesses and other neurological
disorders including Alzheimer's disease, Huntington's Disease and vascular
irregularities. The extent to which such misdiagnosis may have occurred is
presently unknown. Currently, fewer than 10% of all deaths are investigated with
an autopsy, and even a smaller percentage of victims of dementia. The disease is
inevitably fatal as at the present time there is no known effective treatment or
cure for CJD.
The Disease SI Solution
Many non-invasive TSE screening methods are not effective early
detection methods. Disease SI intends to develop screening tests that it
believes will allow for the direct early detection of several types of TSE
diseases. The first application of its technologies will be to undertake TSE
screening. Disease SI believes veterinarians will order tests to screen for the
presence of TSE every one to two years. Through regular screening, Disease SI
believes that tests using its developed technology will enable the detection of
TSE earlier, so that the animals may be properly destroyed and avoid these
diseased animals from entering the food chain.
Disease SI believes TSE screening tests using its technologies could
become a widely accepted and regularly used screening tool as a result of
certain features and benefits including earlier detection, higher sensitivity,
higher compliance and scalability.
Disease SI's goal is to become a contender in the early detection of
TSE. The key components of its strategy include:
- Developing TSE screening technologies. Disease SI selected TSE as the
first technology because the target market is large and not well served. Once
developed, Disease SI intends to license its proprietary technologies and sell
reagents to leading clinical reference laboratories to enable them to develop
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tests. Disease SI may also package its technologies and seek approval for
diagnostic test kits with which any clinical laboratory could conduct its tests.
- Extend its screening technologies to other neurological disorders.
Disease SI believes that its current technologies will be applicable to the
early detection of several other types of neurological disorders. Disease SI
also believes that certain of its technologies allow for the early detection of
without knowledge of the precise basis of the disorder. As a result, it may be
able to develop tests for disorders before the basis of such disorders is
discovered.
Government Regulation
Disease SI will be subject to extensive regulation by the United States
Food and Drug Administration (FDA) under the Federal Food, Drug and Cosmetic
Act, as well as regulations governing the development, marketing, labeling,
promotion, manufacturing and export of its products.
Generally medical devices, a category that will include Disease SI's
to-be-developed products, require FDA approval or clearance before they may be
marketed. The FDA has not, however, actively regulated laboratory tests that
have been developed and used by the laboratory conducting the tests. The FDA
does regulate the sale of reagents used in laboratory tests. The FDA refers to
the reagents used in these tests as analyte specific reagents. Analyte specific
reagents react with a biological substance to identify a specific DNA sequence
or protein and generally do not require FDA approval or clearance if they are
used in-house laboratories or are sold to clinical laboratories certified by the
government to perform high complexity testing and are labeled in accordance with
FDA requirements, including a statement that their analytical and performance
characteristics have not been established. A similar statement would also be
required on all advertising and promotional materials relating to analyte
specific reagents such those to be developed by Disease SI. Laboratories also
are subject to restrictions on the labeling and marketing of tests that have
been developed using analyte specific reagents. The analyte specific reagent
regulatory category is relatively new and its boundaries are not well defined,
and there has been some discussion within the government of changing the analyte
specific reagent regulation, although it is not certain whether any such changes
would affect Disease SI plan of operation. In the event Disease SI is successful
in implementing its plan of operation, Disease SI believes that its in-house
testing and the analyte specific reagents that it intends to sell to leading
clinical reference laboratories will not require FDA approval or clearance.
Disease SI cannot be sure, however, that the FDA will not assert that its tests
or one or more of its reagents require premarket approval or clearance. In
addition, Disease SI cannot be sure that the FDA will not treat the licensing of
its intellectual property as labeling that would subject the reagent to
premarket approval or clearance and other FDA regulation. In addition, Disease
SI cannot be sure that the FDA will not change its position in ways that could
negatively affect its operations.
Any diagnostic test kits that Disease SI may sell would require FDA
approval or clearance before they could be marketed. There are two review
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procedures by which a product may receive such approval or clearance. Some
products may qualify for clearance under a premarket notification, or 510(k)
procedure, in which the manufacturer provides to the FDA a premarket
notification that it intends to begin marketing the product, and demonstrates to
the FDA's satisfaction that the product is substantially equivalent to a legally
marketed product, which means that the product has the same intended use as, is
as safe and effective as, and does not raise different questions of safety and
effectiveness than a legally marketed device. A 510(k) submission for an in
vitro diagnostic device generally must include manufacturing and performance
data, and in some cases, it must include data from human clinical studies.
Marketing may commence when FDA issues a clearance letter.
If a medical device does not qualify for the 510(k) procedure, the FDA
must approve a premarket approval application, or PMA, before marketing can
begin. PMA applications must demonstrate, among other matters, that the medical
device is safe and effective. A PMA application is typically a complex
submission, usually including the results of preclinical and extensive clinical
studies. Before FDA will approve a PMA, the manufacturer must pass an inspection
of its compliance with the requirements of the FDA's quality system regulations.
Assuming that Disease SI is successful in implementing its business
plan, Disease SI believes that most, if not all, of the products which it
anticipates it will develop and sell in diagnostic test kit form will require
PMA approval. The PMA process is lengthy and costly, and Disease SI cannot be
sure that the FDA will approve PMAs for its products in a timely fashion, if at
all. FDA requests for additional studies during the review period are not
uncommon, and can significantly delay approvals. Even if Disease SI were able to
gain approval of a product for one indication, changes to the product, its
indication, or its labeling would be likely to require additional approvals.
Regardless of whether a medical device requires FDA approval or
clearance, a number of other FDA requirements apply to its manufacturer and to
those who distribute it. Device manufacturers must be registered and their
products listed with the FDA, and certain adverse events and product
malfunctions must be reported to the FDA. The FDA also regulates the product
labeling, promotion, and in some cases, advertising, of medical devices.
Manufacturers must comply with the FDA's quality system regulation which
establishes extensive requirements for quality control and manufacturing
procedures. Thus, manufacturers and distributors must continue to spend time,
money and effort to maintain compliance, and failure to comply can lead to
enforcement action. The FDA periodically inspects facilities to ascertain
compliance with these and other requirements.
Disease SI will also be subject to U.S. and state laws and regulations
regarding the operation of clinical laboratories. The federal Clinical
Laboratory Improvement Act and laws of certain other states, impose
certification requirements for clinical laboratories, and establish standards
for quality assurance and quality control, among other things. Clinical
laboratories are subject to inspection by regulators, and the possible sanctions
for failing to comply with applicable requirements. Sanctions available under
the Clinical Laboratory Improvement Act include prohibiting a laboratory from
12
running tests, requiring a laboratory to implement a corrective plan, and
imposing civil money penalties. If Disease SI should fail to meet the
requirements of the Clinical Laboratory Improvement Act or state law, it could
cause it to incur significant expense.
Any failure by Disease SI to comply with these laws, rules and
regulations could lead to stringent sanctions, including withdrawal of products
from the market, recalls, refusal to authorize government contracts, product
seizures, civil money penalties, injunctions and criminal prosecution.
Competition and General Business Risks
The clinical laboratory business is intensely competitive and Disease
SI believes that consolidation will continue in the clinical laboratory testing
business. Competitors in this segment range in size from small private companies
to large multinational corporations. Disease SI will seek to compete only in
very specific market niches and will not attempt to pursue the most competitive
general diagnostics markets. Disease SI believes, although there are no
assurances, that it will be able to compete based on its technological ability
to provide customers with very specific tests. Competitors will include Abbot
Laboratories, bioMerieux, Inc., Roche Diagnostics, BioChem Pharma, Inova,
diaSorin, Bayer, Bio-Rad, Paradigm and Medical Analysis Systems. In the intense
competitive environment that is the pharmaceutical industry, those companies
that complete clinical trials, obtain regulatory approval and commercialize
their drug products first will enjoy competitive advantages.
To Disease SI's knowledge, none of the large or diagnostics companies
are developing tests to conduct blood, urine or feces-based TSE testing;
however, companies may be working on such tests that have not yet been
announced. In addition, other companies may succeed in developing or improving
technologies and marketing products and services that are more effective or
commercially attractive than those which may be developed or offered by Disease
SI. Most of these companies may be larger than Disease SI and will be able to
commit significantly greater financial and other resources to all aspects of
their business, including research and development, marketing, sales and
distribution.
Disease SI's prospects must be considered in light of the risks,
expenses and difficulties frequently encountered by companies in their early
stages of development, particularly companies in new and rapidly evolving
markets. Disease SI will encounter various risks in implementing and executing
its business strategy and we can provide no assurance that it will be successful
in addressing such risks, and the failure to do so could have a material adverse
effect on our business. Our current cash forecast indicates that there will be
negative cash flow from our operations for the foreseeable future.
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Employees
As of April 30, 2001, Disease SI employed a total of three employees,
all of whom work full-time. Disease SI has no collective bargaining agreements
with any unions and believes that the overall relations with its employees are
excellent.
Management
Dr. Wayne Goldstein, Mr. Brian S. John and Dr. Bryant Villeponteau
have recently been appointed as directors and/or officers of
AuctionAnything.com.
Dr. Wayne Goldstein, age 34, has been our Chief Executive Officer and a
director since May 23, 2001, and is the President and co-founder of Disease SI.
Prior to founding Disease S.I. in April 2001, Dr. Goldstein was an asset manager
for Rockledge Capital Management from January 2000 until December 2000. From
March 1999 until February 2000, he was a professional medical representative for
Cytyc Corporation (Nasdaq: CYTC), a publicly-held company that designs,
develops, manufactures and markets sample preparation systems for medical
diagnostics. His responsibilities at Cytyc Corporation included consulting with
obstetricians and gynecologists on implementing new technology into their
practices. From March 1999 until December 1999, he was a sales representative
with Ventiv Health. From July 1994 until December 1999, he had a podiatry
practice in South Florida, where his responsibilities included managing a
podiatric office consisting of two doctors and three skilled assistants, as well
as treating patients. Dr. Goldstein received a B.S. in Psychology/Pre-Medicine
from the University of Maryland in 1988 and a Doctorate of Podiatric Medicine
(DPM) from the Temple School of Medicine in 1992. Dr. Goldstein did his
residency at Frankford Hospital in Philadelphia, Pennsylvania from 1992
until 1994.
Brian S. John, age 33, has been our Vice President and director since
May 23, 2001. Prior to co-founding Disease S.I. in April 2001, from March 1998
until December 2000, Mr. John was President of International Internet's
CigarCigar.com / StogiesOnline.com division. From December 1997 until March
1998, he was a stock broker with GKN Securities Corp. and from December 1997
until December 1997, he was a stock broker with Stratton Oakmont, Inc., holding
both a Series 7 and a Series 63 license at each firm. From May 1991 until April
1996, Mr. John served as Northeast Area Sales Director for Dine-A-Mate, Inc., an
entertainment and dining guide that was later acquired by CUC International. Mr.
John studied Biology at Kutztown State University from 1986 until 1991.
Bryant Villeponteau Ph.D., age 56, has been our Chief Scientific
Officer since June 2001. He brings eighteen years of administration and
scientific experience to Disease S.I. Dr. Villeponteau holds B.A. in Economics,
an M.S. in Biostatistics, and a Ph.D. in Molecular Biology, all from UCLA. From
1982 to 1986, Dr. Villeponteau was Assistant Research Chemist in the Department
of Chemistry and Biochemistry at UCLA, and from 1986 to 1992 was Assistant
Professor of Biological Chemistry at the University of Michigan Institute of
Gerontology. During this period, Dr. Villeponteau was one of the first
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scientists to clone a human aging-related gene. From 1996 until June 1997, Dr.
Villeponteau was with Geron Corporation, a start-up biotech company focused on
age-related diseases, where he developed a patented technique for cataloging
gene expression changes with aging. In 1994, Dr. Villeponteau was the lead
inventor in cloning and characterizing the RNA component of human telomerase
and, along with three other colleagues, won the 1996 Distinguished Inventor
Award for this seminal discovery. Dr. Villeponteau was then made the Program
Director for Telomerase Therapy and led a multi-disciplinary team of 25
scientists for several years. Dr. Villeponteau later served as the head of
Geron's Molecular Discovery Department before joining Health Span Sciences, Inc.
in June 1997 where he initially served as Vice President of Research, heading up
the research department. From March 1998 to June 2000, Dr. Villeponteau served
as President, a directors and Chief Executive Office of Health Span Sciences,
Inc., and from June 2000 until the present, he has served as President, a
director and Chief Scientific Officer of Health Span Sciences, Inc. Since
September 1996 Dr. Villeponteau has been a member of the editorial board of the
Journal of Anti-aging Medicine.
Implementation of Amendment
The increase in the authorized capitalization will be formally
implemented by deleting in its entirety the present fourth paragraph of the
Company's Certificate of Incorporation and replacing it with the following:
"FOURTH: The total number of shares of stock which the
corporation shall have authorized to issue is two hundred and one
million (101,000,000), of which are to be divided into two classes as
follows:
100,000,000 shares of common stock with a par value $.001 per
share, and 1,000,000 shares of preferred stock with a par
value of $.001 per share.
The Board of Directors is authorized, subject to limitations
prescribed by law and the provisions of this Paragraph 4, to provide
for the issuance of the shares of Preferred Stock to series, and to
establish from time to time the number of shares to be included in each
series, and to fix the designation, powers, preferences and relative,
participating, optional or other special rights of the shares of each
series and the qualifications, limitations or restrictions thereof.
The authority of the Board with respect to each series of
Preferred Stock shall include, but not be limited to, determination of
the following:
The number of shares constituting the series and the
distinctive designation of the series;
15
The dividend rate on the shares of the series, whether
dividends shall be cumulative, and, if so, from which date or
dates, and the relative rights of priority, if any, of
payments of dividends on shares of the series;
Whether the series will have voting rights, and, if so,
the terms of the voting rights;
Whether the series will have conversion privileges, and, if
so, the terms and conditions of the conversion, including
provision for adjustment of the conversion rate in such events
as the Board of Directors determines;
Whether or not the shares of the series will be redeemable,
and, if so, the terms and conditions of the redemption,
including the date or dates upon or after which they shall be
redeemable, and the amount per share payable in case of
redemption, which amount may vary under different conditions
and at different redemption dates;
Whether the series shall have a sinking fund for the
redemption or purchase of shares of the series, and, if so,
the terms and amount of the sinking fund;
The rights of the shares of the series in the event of
voluntary or involuntary liquidation, dissolution or winding
up of the Company, and the relative rights or priority, if any
payment of shares of the series; and
Any other relative terms, rights, preferences and limitations,
if any, of the series as the Board of Directors may lawfully
fix under the laws of the State of Delaware as in effect at
the time of the creation of such series."
This Certificate of Amendment to our Certificate of Incorporation will
be effective upon its filing with the Secretary of State of Delaware.
Immediately upon such filing, we will issue the remaining 38,790,696 shares of
our Common Stock we are obligated to issued to Dr. Goldstein and Mr. John under
the terms of the Disease SI Agreement.
BY ORDER OF THE
BOARD OF DIRECTORS
/s/ Dr. Wayne Goldstein
------------------------------
Dr. Wayne Goldstein, President
16
EXHIBIT A
CERTIFICATE OF AMENDMENT
TO THE CERTIFICATE OF INCORPORATION
OF
AUCTIONANYTHING.COM, INC.
AuctionAnything.com, Inc., a corporation organized and existing under
the Delaware Business Corporation Laws (the "Corporation"),
DOES HEREBY CERTIFY:
FIRST: That the fourth paragraph of the Corporation's Certificate
of Incorporation, as amended, is hereby deleted in its entirety and replaced
with the following:
"FOURTH: The total number of shares of stock which the
corporation shall have authorized to issue is two hundred and one
million (101,000,000), of which are to be divided into two classes as
follows:
100,000,000 shares of common stock with a par value $.001 per
share, and 1,000,000 shares of preferred stock with a par
value of $.001 per share.
The Board of Directors is authorized, subject to limitations
prescribed by law and the provisions of this Paragraph 4, to provide
for the issuance of the shares of Preferred Stock to series, and to
establish from time to time the number of shares to be included in each
series, and to fix the designation, powers, preferences and relative,
participating, optional or other special rights of the shares of each
series and the qualifications, limitations or restrictions thereof.
The authority of the Board with respect to each series of
Preferred Stock shall include, but not be limited to, determination of
the following:
The number of shares constituting the series and the
distinctive designation of the series;
The dividend rate on the shares of the series, whether
dividends shall be cumulative, and, if so, from which date or
dates, and the relative rights of priority, if any, of
payments of dividends on shares of the series;
Whether the series will have voting rights, and, if so,
the terms of the voting rights;
A-1
Whether the series will have conversion privileges, and, if
so, the terms and conditions of the conversion, including
provision for adjustment of the conversion rate in such events
as the Board of Directors determines;
Whether or not the shares of the series will be redeemable,
and, if so, the terms and conditions of the redemption,
including the date or dates upon or after which they shall be
redeemable, and the amount per share payable in case of
redemption, which amount may vary under different conditions
and at different redemption dates;
Whether the series shall have a sinking fund for the
redemption or purchase of shares of the series, and, if so,
the terms and amount of the sinking fund;
The rights of the shares of the series in the event of
voluntary or involuntary liquidation, dissolution or winding
up of the Company, and the relative rights or priority, if any
payment of shares of the series; and
Any other relative terms, rights, preferences and limitations,
if any, of the series as the Board of Directors may lawfully
fix under the laws of the State of Delaware as in effect at
the time of the creation of such series."
The foregoing Certificate of Amendment to the Certificate of
Incorporation was adopted by the Board of Directors of the Corporation acting by
written consent dated 2001, and by the holders of a majority of its issued and
outstanding Common Stock by written consents of such shareholders effective June
, 2001. Therefore, the number of votes cast was sufficient for approval.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to the Certificate of Incorporation to be executed by its duly
authorized officer.
Signed, this ____ day of June, 2001.
---------------------------
----------------, President
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