Tds Telemedicine, Inc (TDSM) - Description of business
Forward Looking Statements
In addition to historical information, this Form 10-KSB contains forward looking statements relating to such matters as anticipated financial and operational performance, business prospects, and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. The Company notes that a variety of factors could cause the Company's actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company's forward looking statements. When used in this Form 10-KSB, the words or phrases "believes," "anticipates," "expects," "intends," "will likely result," "estimates," "projects" or similar expressions are intended to identify such forward looking statements, but are not the exclusive means of identifying such statements. Such forward-looking statements are only predictions, and the actual events or results may differ materially from the results discussed in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date of this report.
Historical Business Development
The Company was formed as a New York corporation on November 30, 2000. In 2002 the Company acquired TDS-USA in a reverse merger transaction. TDS-USA had been engaged in the telemedicine diagnostic services industry since January 1998, and continued in that business until 2004. As a result of a bankruptcy filing in June 2004 of the Company's operating subsidiary, tds (Dermatology) Limited, the Company ceased operations in 2004.
Early in 2005, TDS's management began to review opportunities to acquire an operating company through a "reverse merger" procedure.
In May 2005 TDS (Telemedicine) entered into a Management Services Agreement with Greenshift Corporation. Greenshift agreed to provide interim management assistance and financial support, while preparing TDS (Telemedicine) for a strategic acquisition. In compensation for those services, tds (Telemedicine) will issue to GreenShift common stock equal to 75% of its outstanding stock plus common stock with a market value of $150,000 plus $50,000 per quarter during which services are provided.
The Company currently has no employees other than its President.
BUSINESS RISK FACTORS
There are many important factors that have affected, and in the future could affect, tds (Telemedicine)'s business, including but not limited to the factors discussed below, which should be reviewed carefully together with other information contained in this report. Some of the factors are beyond our control and future trends are difficult to predict.
BUSINESS RISK FACTORS (continued)
The Company is not a going concern.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company, however, is a shell company without any operations. As of June 30, 2006 the Company did not have any cash, and had current liabilities in excess of $600,000. These matters raise substantial doubt about the Company's ability to continue as a going concern.
The bankruptcy proceeding of our tds (Dermatology) Limited, subsidiary exposes us to risks and uncertainties.
The wholly owned subsidiary, tds (Dermatology) Limited, "Limited", was placed into administrative status of the UK bankruptcy code in June 2004. Certain claims might be brought against the Company seeking to hold the Company liable for certain transfers made by Limited to the Company and/or for Limited's obligations to creditors under various equitable theories recognized under bankruptcy law. As of June 30, 2006, there have been no such claims filed against the Company or any of its current or former officers or directors, and we do not expect any material claims to be filed. However, the outcome of complex litigation (including claims which may be asserted against us) cannot be predicted with certainty and its dependent upon many factors beyond the Company's control; however, any such claims, if successful, could have a material adverse impact on the Company's financial condition. We may incur additional costs in connection with the Company's involvement in the Limited bankruptcy proceedings.
The Company is not likely to hold annual shareholder meetings in the next few years.
New York corporation law provides that members of the board of directors retain authority to act until they are removed or replaced at a meeting of the shareholders. A shareholder may petition the court to direct that a shareholders meeting be held. But absent such a legal action, the board has no obligation to call a shareholders meeting. Unless a shareholders meeting is held, the existing directors elect directors to fill any vacancy that occurs on the board of directors. The shareholders, therefore, have no control over the constitution of the board of directors, unless a shareholders meeting is held. Management does not expect to hold annual meetings of shareholders in the next few years, due to the expense involved. Kevin Kreisler is currently the sole director of the Company and was appointed to that position by the previous directors. If other directors are added to the Board in the future, it is likely that Mr. Kreisler will appoint them. As a result, the shareholders of the Company will have no effective means of exercising control over the operations of the Company.
BUSINESS RISK FACTORS (continued)
GreenShift Corporation can exert control over us and may not make decisions that further the best interests of all stockholders.
GreenShift Corporation is entitled to obtain over 80% of our voting stock. As a result, GreenShift Corporation may exert a significant degree of influence over our management and affairs and over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. In addition, this concentration of ownership may delay or prevent a change in control of us and might affect the market price of our common stock, even when a change in control may be in the best interest of all stockholders. Furthermore, the interests of this concentration of ownership may not always coincide with our interests or the interests of other stockholders and accordingly, they could cause us to enter into transactions or agreements which we would not otherwise consider.
Investing in our stock is highly speculative and you could lose some or all of your investment.
The value of our common stock may decline and may be affected by numerous market conditions, which could result in the loss of some or the entire amount invested in our stock. The securities markets frequently experience extreme price and volume fluctuations that affect market prices for securities of companies generally and very small capitalization companies such as us in particular.
Our common stock qualifies as a "penny stock" under SEC rules which may make it more difficult for our stockholders to resell their shares of our common stock.
The holders of our common stock may find it more difficult to obtain accurate quotations concerning the market value of the stock. Stockholders also may experience greater difficulties in attempting to sell the stock than if it were listed on a stock exchange or quoted on the NASDAQ National Market or the NASDAQ Small-Cap Market. Because our common stock does not trade on a stock exchange or on the NASDAQ National Market or the NASDAQ Small-Cap Market, and the market price of the common stock is less than $5.00 per share, the common stock qualifies as a "penny stock." SEC Rule 15g-9 under the Securities Exchange Act of 1934 imposes additional sales practice requirements on broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as an "established customer" or an "accredited investor." This includes the requirement that a broker-dealer must make a determination on the appropriateness of investments in penny stocks for the customer and must make special disclosures to the customer concerning the risks of penny stocks. Application of the penny stock rules to our common stock affects the market liquidity of the shares, which in turn may affect the ability of holders of our common stock to resell the stock.
Only a small portion of the investment community will purchase "penny stocks" such as our common stock.
Our common stock is defined by the SEC as a "penny stock" because it trades at a price less than $5.00 per share. Our common stock also meets most common definitions of a "penny stock," since it trades for less than $1.00 per share. Many brokerage firms will discourage their customers from purchasing penny stocks, and even more brokerage firms will not recommend a penny stock to their customers. Most institutional investors will not invest in penny stocks. In addition, many individual investors will not consider a purchase of a penny stock due, among other things, to the negative reputation that attends the penny stock market. As a result of this widespread disdain for penny stocks, there will be a limited market for our common stock as long as it remains a "penny stock." This situation may limit the liquidity of your shares.