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REMOTE MDX INC - SB-2/A - 20060302 - PART_I
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
REMOTEMDX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
December 31,
2005
-------------
Assets
Current assets:
Cash $ 1,212,968
Accounts receivable, net of allowance for doubtful accounts of $23,000 93,623
Inventories 38,169
Restricted cash 181,564
Prepaid expenses 37,299
Total current assets 1,563,623
Property and equipment, net of accumulated depreciation and amortization
of $513,339 381,657
Other assets 43,098
-------------
Total assets $ 1,988,378
Liabilities and Stockholders' (Deficit)
Current liabilities:
Bank line of credit $ 174,475
Related party line of credit and note, net debt discount of $3,750 (note 5) 252,113
Accounts payable 1,494,226
Accrued liabilities 497,508
Dividends payable 124,461
Deferre drevenue 17,757
Convertible debentures, net of debt discount of $28,087 (note 6) 1,290,452
Notes payable, net of debt discount of $692 (note 3) 780,697
Common stock subject to mandatory redemption 96,000
Embedded derivative liability (note 8) 2,926,527
Redeemable SecureAlert Series A Preferred Stock (note 7) 358,410
Total current liabilities 8,012,626
Long term liabilities
Convertible debentures, net of discountof $814,722 (note 3) 656,196
-------------
Total liabilities 8,668,822
SecureAlert Series A Preferred Stock 2,990,000
Stockholders' deficit:
Preferred stock:
Series A; 10% dividend, convertible, non-voting; $0.0001 par value;
40,000 shares designated; 21,786 shares outstanding (aggregate liquidation
preference of $59,605) 2
Series B; convertible; $0.0001 par value; 2,000,000 shares designated;
272,332 shares outstanding (aggregate liquidation preference of $816,996) 27
Common stock; $0.0001 par value; 100,000,000 shares authorized,
54,416,288 shares outstanding 5,442
Additional paid-in capital 78,106,677
Deferred compensation (3,873,144)
Accumulated deficit (83,909,448)
-------------
Total stockholders' deficit (9,670,444)
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Total liabilities and stockholders' deficit $ 1,988,378
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See accompanying notes to unaudited condensed consolidated financial statements.
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Q-3
REMOTEMDX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
December 31,
2005 2004
---------------- ---------------
Net sales $ 219,493 $ 207,519
Cost of goods sold 107,143 147,084
------------------- ---------------
Gross profit 112,350 60,435
Operating expenses
Research and development expenses 729,933 204,730
Selling, general and administrative expenses (including $451,820 and
$123,525 of compensation expense paid in stock or stock option /
warrants, respectively.) 1,743,612 933,335
---------------- ---------------
Loss from operations (2,361,195) (1,077,630)
Other income (expense):
Derivative valuation gain (loss) (490,901) -
Other income (expense) 2,000 (30)
Interest income 1,253 817
Interest expense (596,910) (238,983)
---------------- ---------------
Loss before income taxes (3,445,753) (1,315,826)
Income tax benefit - -
---------------- ---------------
Net loss (3,445,753) (1,315,826)
Dividends on Series A preferred stock (124,461) (128,649)
---------------- ---------------
Net loss attributable to common shareholders $ (3,570,214) $ (1,444,475)
================ ===============
Net loss per common share - basic and diluted $ (0.08) $ (0.05)
================ ===============
Weighted average common shares outstanding - basic and diluted 47,166,000 31,455,000
================ ===============
See accompanying notes to unaudited condensed consolidated financial statements.
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Q-4
REMOTEMDX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
December 31,
2005 2004
---------------- ---------------
Cash flows from operating activities:
Net loss $ (3,445,753) $ (1,315,826)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 16,427 6,065
Derivative liability valuation 490,901 -
Common stock issued for services 27,000 -
Common stock issued for interest 63,366 -
Amortization of deferred financing and consulting costs 562,937 127,575
Accretion of interest expense related to redeemable common stock
and debt 154,584 -
Amortization of debt discount 139,252 27,000
Stock options issued for services - 133,397
Increase in related party line of credit for services 175,562 128,594
Changes in operating assets and liabilities:
Increase in restricted cash (1,461) (753)
Accounts receivable, net 3,158 155,734
Inventories 8,407 (10,998)
Prepaid expenses (4,164) 1,715
Accounts payable 139,176 141,319
Accrued liabilities (191,517) 62,442
Deferred revenue 218 (504)
---------------- ---------------
Net cash used in operating activities (1,861,907) (544,240)
---------------- ---------------
Cash flows used in investing activities - purchase of property and equipment (17,369) (4,220)
---------------- ---------------
Cash flows from financing activities:
Net (repayments) borrowings under related-party line of credit (192,314) (12,596)
Net borrowings (payments) on bank line of credit (423) -
Decrease in subscription receivable 504,900 -
Proceeds from issuance of common stock, net of $35,000 commissions 700,000 -
Proceeds from the issuance of subsidiary preferred stock 600,000 260,000
Proceeds from issuance of notes payable and convertible debentures 1,075,000 500,000
Payments on notes payable (10,955) (144,500)
---------------- ---------------
Net cash provided by financing activities 2,676,208 602,904
---------------- ---------------
Net increase in cash 796,932 54,444
Cash, beginning of period 416,036 62,103
---------------- ---------------
Cash, end of period $ 1,212,968 $ 116,547
================ ===============
See accompanying notes to unaudited condensed consolidated financial statements.
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Q-5
REMOTEMDX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)
Three Months Ended
December 31,
2005 2004
---------------- ---------------
Cash paid for interest and taxes:
Cash paid for income taxes $ - $ -
Cash paid for interest 43,400 14,649
Supplemental schedule of non-cash investing and financing activities:
Issuance of shares of common stock in exchange for shares of Series A
preferred stock 1 1
Accrual of Preferred Series A stock dividends 124,461 128,649
Common stock issued for deferred financing costs 721,050 8,100
See accompanying notes to unaudited condensed consolidated financial statements.
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Q-6
REMOTEMDX, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) ORGANIZATION AND NATURE OF OPERATIONS
Basis of Presentation
The accompanying condensed consolidated financial statements of the Company have
been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States have been
condensed or omitted pursuant to such rules and regulations. These condensed
consolidated financial statements reflect all adjustments (consisting only of
normal recurring adjustments) that, in the opinion of management, are necessary
to present fairly the results of operations of the Company for the periods
presented. These condensed consolidated financial statements should be read in
conjunction with the consolidated financial statements and the notes thereto
included in the Company's Form 10-KSB for the year ended September 30, 2005. The
results of operations for the three months ended December 31, 2005 are not
necessarily indicative of the results that may be expected for the fiscal year
ending September 30, 2006.
Going Concern
The Company has recurring net losses, has negative cash flows from operating
activities and has a working capital deficit, a stockholders' deficit and an
accumulated deficit. These factors raise substantial doubt about the Company's
ability to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Management's plans with respect to this uncertainty include converting debt
obligations to equity and raising additional capital from the sale of equity
securities, obtaining debt financing and enhance revenues and cash flows from
its operations by increasing selling and marketing efforts related to new and
existing products and services.
There can be no assurance that the Company will be able to raise sufficient
capital to meet its working capital needs. In addition, there can be no
assurance that the operations will generate positive cash flows and that the
Company will be economically successful from increasing selling and marketing
efforts to introduce new products into the market. Further, the Company may be
unable to complete the development and successful commercialization of any new
remote health monitoring products.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the
Company and its wholly or majority-owned subsidiaries. All significant
inter-company transactions have been eliminated in consolidation.
Stock-Based Compensation
The Company accounts for its stock-based compensation issued to employees and
directors under Accounting Principles Board Opinion ("APB") No. 25, "Accounting
for Stock Issued to Employees," and related interpretations. Under APB No. 25,
compensation related to stock options, if any, is recorded if an option's
exercise price on the measurement date is below the fair value of the Company's
common stock and amortized to expense over the vesting period.
An alternative method to the intrinsic value method of accounting for
stock-based compensation is the fair value based method prescribed by Statement
of Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based
Compensation," as amended by SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure." If the Company used the fair value
based method, the Company would be required to record deferred compensation
based on the fair value of the stock option at the date of grant as computed
using an option-pricing model, such as the Black-Scholes option pricing model.
The deferred compensation calculated under the fair value based method would
then be amortized over the vesting period of the stock option. The Company
awarded no stock options to employees and had no employee stock options vest
during the periods ended December 31, 2005 and 2004.
Q-7
Impairment of Long-Lived Assets
The Company reviews its long-lived assets for impairment when events or changes
in circumstances indicate that the book value of an asset may not be
recoverable. The Company evaluates, at each balance sheet date, whether events
and circumstances have occurred which indicate possible impairment. The Company
uses an estimate of future undiscounted net cash flows of the related asset or
group of assets over the estimated remaining life in measuring whether the
assets are recoverable.
Net Loss Per Common Share
Basic net loss per common share ("Basic EPS") is computed by dividing net loss
available to common stockholders by the weighted average number of common shares
outstanding during the period. Diluted net loss per common share ("Diluted EPS")
is computed by dividing net loss by the sum of the weighted-average number of
common shares outstanding and the weighted-average dilutive common share
equivalents then outstanding. The computation of Diluted EPS does not assume
exercise or conversion of securities that would have an anti-dilutive effect.
Common share equivalents consist of shares issuable upon the exercise of common
stock options and warrants, and shares issuable upon conversion of preferred
stock. Common share equivalents does not include shares from conversion of debt
since the number of shares are yet to be determined. As of December 31, 2005 and
2004, there were approximately 22,840,255 and 18,335,000 outstanding common
share equivalents, respectively, that were not included in the computation of
diluted net loss per common share as their effect would be anti-dilutive.
Revenue Recognition
The Company derives its revenue primarily from the sale of mobile emergency and
personal security systems and reagent stains.
The sale of mobile emergency and personal security systems may include the
security device, such as the MobilePal phone, and the related monitoring
service. If the sale includes both the device and the monitoring service,
revenue from the sale of the device is deferred and recognized ratably over the
life of the monitoring service contract. Revenue from the monitoring service
contract is recognized monthly as earned in accordance with the monitoring
service contract. If the sale is for the device only and does not include the
monitoring services, revenue, less reserves for returns, is recognized upon
shipment to the customer. The Company records reserves for estimated returns of
defective product. Amounts received in advance of shipment are recorded as
deferred revenue. Shipping and handling fees are included as part of net sales.
The related freight costs and supplies directly associated with shipping
products to customers are included as a component of cost of goods sold.
The sale of reagent stains is recognized when an agreement with the buyer
exists, the price is fixed or determinable, the product has been shipped, and
collection is reasonably assured.
(2) INVENTORIES
Substantially all items included in inventory were finished goods and consist of
the following as of December 31, 2005:
Mobile emergency and personal security systems,
net of reserve of $63,696 $ 7,244
Reagent Stains 30,925
-----------------
Total inventory $ 38,169
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(3) NOTES PAYABLE
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Notes payable at December 31, 2005 consisted of the following:
Current liabilities:
Q-8
Unsecured note payable to a corporation with interest at
5%. The note was due December 20, 2005. This
note is in default. $ 95,830
Unsecured notes payable to former SecureAlert
shareholders, with interest at 5%, payable in
installments of $80,000 per month until paid in full.
These notes are currently in default. 169,676
Unsecured note payable to an entity. The note has
a monthly payment of $1,985. The loan bears no
interest, but has been imputed at 12%. The note is
due September 18, 2006. As of December 31, 2005,
the unamortized debt discount was $692. 15,191
Convertible notes payable to entities with interest at
8%. The note is due February 28, 2006. The note may
convert into Series C Convertible Preferred Stock at $1.12
per share. A contingent beneficial conversion feature has
been calculated for a value of $303,572 and will be recognized
upon the of the closing of Series C Preferred Stock. 500,000
---------
$ 780,697
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Long term liabilities:
Unsecured convertible note payable with interest
at 18% (effective interest rate of 29.83%), maturing
on September 16, 2008. Three years of prepaid
interest has been paid through the issuance of
363,000 shares of restricted common stock valued
at $515,460. The holder of the note may convert
any portion of the outstanding balance at the lower
of 50% of the fair value of the Company's common
stock or $0.40 per share. A beneficial conversion
feature of $363,000 was recorded. As of December
31, 2005, the unamortized debt discount was $327,708. $ 35,292
Unsecured convertible note payable with interest
at 18% (effective interest rate of 26.17%), maturing
on May 3, 2008. Three years of prepaid interest
has been paid through the issuance of 127,500
shares of restricted common stock valued at $68,850.
The holder of the note may convert any portion of
the outstanding balance at the lower of 50% of
the fair value of the Company's common stock
or $0.40 per share. A beneficial conversion
feature of $127,500 was recorded. As of
December 31, 2005, the unamortized debt discount
was $99,166. 28,334
Unsecured convertible notes payable with interest
at 18% (effective interest rate of 26.15%), and
maturity dates of March 7, 2008, April 7, 2008, and
August 14, 2008. Three years of prepaid interest
has been paid through the issuance of 600,000
restricted shares of common stock valued at
$324,000. The holder of the note may convert
any portion of the outstanding balance at the
lower of 50% of the fair value of the Company's
common stock or $0.40 per share. A beneficial
conversion feature of $320,000 was recorded.
As of December 31, 2005, the unamortized debt
discount was $264,931. 335,069
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Q-9
Unsecured convertible notes payable with interest
at 18% (effective interest rate of 54.24%), and
maturity dates of May 2, 2008 and September 15,
2008. Three years of prepaid interest has been
paid through the issuance of 150,000 shares of
restricted common stock valued at $125,000. The
holder of the note may convert any portion of the
outstanding balance at the lower of 50% of the fair
value of the Company's common stock or $0.40
per share. A beneficial conversion feature of
$150,000 was recorded. As of December 31,
2005, the remaining debt discount was $122,917. 27,083
Unsecured convertible notes payable with interest
at 18% (effective interest rate of 39.72%), and
maturity dates of June 15, 2008 and September
15, 2008. Three years of prepaid interest has been
paid through the issuance of 1,280,000 shares of
restricted common stock valued at $883,600. The
holder of the note may convert any portion of the
outstanding balance at 50% of the fair value of the
Company's common. As of December 31, 2005,
the unaccreted balance was $1,097,499. These notes
have conversion features that are considered embedded
derivatives and therefore, are subject to derivative
accounting. (See Note 8) 182,501
Unsecured convertible notes payable with interest
at 5% (effective interest rate of 31.86%), and
maturity dates of September 30, 2008. Three years
of prepaid interest has been paid through the issuance
of 575,000 shares of restricted common stock valued
at $655,500. The holder of the note may convert any
portion of the outstanding balance at the lower of 50%
of the fair value of the Company's common or $0.60 per
share. As of December 31, 2005, the unaccreted balance
was $527,083. These notes have conversion features that
are considered embedded derivatives and therefore, are
subject to derivative accounting. (See Note 8) 47,917
---------
$ 656,196
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(4) BANK LINE OF CREDIT
As of December 31, 2005, the Company had $174,475 outstanding under a line of
credit with Zions First National Bank. The line of credit bears interest at
prime plus .25% (7.25%), matures on March 11, 2006, is limited to $175,000 plus
fees, and is secured by certificates of deposit which the Company holds as
restricted cash of $181,564.
(5) RELATED PARTY LINE OF CREDIT AND NOTE
As of December 31, 2005, the Company owed to ADP Management, an entity owned and
controlled by two of the Company's officers and directors $863, under a line of
credit agreement. Outstanding amounts on the line of credit accrue interest at
Q-10
5.0% and are due in July 2006. During the three months ended December 31, 2005,
the net decrease in the related party line of credit was $16,752. The net
decrease consisted of net cash repayments during the quarter of $192,314 and net
increases of $175,562 related to a monthly management fee owed to ADP Management
and expenses incurred by ADP Management that are reimbursable by the Company. If
the Company is unable to pay the management fee and the reimbursable expenses in
cash, the related party line of credit is increased for the amount owed to ADP
Management.
The Company entered into a loan with an entity controlled by an employee of the
Company. The loan bears interest at 17%. An origination fee of $10,000 was added
to the principal balance owed under the note. Principal and interest were due
November 13, 2005. The first four months are interest only and the last three
months are interest and principal. This loan is secured by the stock and assets
of Volu-Sol Reagents Corporation, a wholly-owned subsidiary of RemoteMDx, Inc.
As of December 31, 2005, the balance net of the debt discount was $251,250. The
note has been extended for cash payments of $10,000 per month.
(6) CONVERTIBLE DEBENTURES
During the year ended September 30, 2004, the Company sold $1,450,000 of Series
B Convertible Debentures and $350,000 of Series C Convertible Debentures. The
Debentures are convertible automatically into shares of the Company's common
stock upon the closing of a qualified equity or debt offering with gross
proceeds of at least $5,000,000. Under the terms, the conversion price will
equal 80% of the fair value prior to closing the offering. The Debentures bear
interest at an annual rate of 10%, not including any original issue discount,
with interest during the first six months of $47,954 added to the principal
amount. Thereafter, interest payments will be made monthly in cash or, at the
sole option of the Company, in shares of Common Stock at a price of $0.54 per
share. The Debentures mature and are payable two years from each Closing,
subject to the conversion as indicated above. As of December 31, 2005, the
convertible debentures net of debt discount was $1,290,452.
(7) PREFERRED STOCK
Series A 10 % Convertible Non-Voting Preferred Stock
During the three months ended December 31, 2005, a total of 4,221 shares of
Series A Preferred Stock were converted into 1,565,025 shares of common stock.
As of December 31, 2005, there were 21,786 shares of Series A Preferred Stock
outstanding, which represents 8,060,650 common stock equivalents at a conversion
rate of 370 for 1.
The holders of the Series A Preferred Stock are entitled to dividends at the
rate of 10 percent per year on the stated value of the Series A Preferred Stock
(or $200 per share), payable in cash or in additional shares of Series A
Preferred Stock at the discretion of the board of directors. Dividends are fully
cumulative and accrue from the date of original issuance. During the three
months ended December 31, 2005 and 2004, the Company recorded $124,461 and
$128,649, respectively, in dividends on Series A Preferred Stock.
The Company may, at its option, redeem up to two-thirds of the total number of
shares of Series A Preferred Stock at a redemption price of 133 percent of the
stated value of Series A Preferred Stock; however, the Company may designate a
different and lower redemption price for all shares of Series A Preferred Stock
called for redemption by the Company. Through December 31, 2005, the Company had
not exercised its option to redeem shares of Series A Preferred Stock.
Series B Convertible Preferred Stock
During the three months ended December 31, 2005, a total of 1,096,825 shares of
Series B Preferred Stock were converted into 5,652,381 shares of common stock.
As of December 31, 2005, there were 272,332 shares of Series B Preferred Stock
outstanding convertible into approximately 2,043,000 common shares.
SecureAlert, Inc. Preferred Shares
During the year ended September 30, 2005, and pursuant to Board of Director
approval, the Company amended the articles of incorporation of its wholly owned
subsidiary, SecureAlert, Inc., to establish 3,500,000 shares of preferred stock
designated as Series A Convertible Redeemable Non-Voting Preferred Stock. The
holders of shares of Series A Preferred Stock shall be entitled to receive
quarterly dividends out of any of SecureAlert's assets legally available
therefore, prior and in preference to any declaration or payment of any dividend
on the Common Stock of the SecureAlert, at the rate of $1.50 per day times the
number of SecureAlert's parolee contracts calculated in days during the quarter.
For example, if there were an average of 10,000 parolee contracts outstanding
during the quarter, the total dividend would be $1,350,000 ($1.50 X 90 days X
Q-11
10,000 contracts) or $.385/Series A Preferred Stock. In no case will a dividend
be paid if the gross revenue per contract per day to SecureAlert averages less
than $4.50. Dividends will be paid in cash to the holders of record of shares of
Series A Preferred Stock as they appear on the books and records of SecureAlert
on such record dates not less than ten (10) days nor more than sixty (60) days
preceding the payment dates thereof, as may be fixed by the Board of Directors
of SecureAlert. As a group, all Series A Preferred Stock may be converted at the
holder's option at any time into an aggregate of 20% ownership of the common
shares of the SecureAlert, Inc. During the quarter ended December 31, 2005, the
Company sold 600,000 of these shares for $600,000. As of December 31, 2005,
there were 3,590,000 shares of SecureAlert Series A Preferred Stock.
The 600,000 shares of SecureAlert Series A Preferred Stock issued during the
quarter have an additional feature where the Company will buy back the
SecureAlert Series A Preferred Shares and pay the investor 15% interest should
the Company not have contracts for a total of 7,000 parolee units by March 31,
2006. There is doubt that the Company will secure 7,000 parolee contracts by
March 31, 2006; therefore, in accordance with SFAS No. 150, Accounting for
Certain Financial Instruments with Characteristics of Both Liabilities and
Equity, the redemption value of the redeemable shares has been recorded as a
liability. The Company has committed to collateralize these instruments with
600,000 free trading shares of its common stock. In addition, each holder
received an option to purchase 1 share of common stock with an exercise price of
$1.00 per share for each share of SecureAlert Series A Preferred Shares
received. The Black-Scholes model was used to determine the value for the
600,000 options issued. The value of the options was $443,515. The detachable
warrants were valued at $443,515 and the debt discount was prorated. As of
December 31, 2005, the unamortized debt discount was $241,590.
(8) DERIVATIVES
The Company does not hold or issue derivative instruments for trading purposes.
However, the Company has convertible notes payable that contain embedded
derivatives that require separate valuation from the convertible notes. The
Company recognizes these derivatives as liabilities in its balance sheet and
measures them at their estimated fair value, and recognizes changes in their
estimated fair value in earnings (losses) in the period of change. The Company
has estimated the fair value of these embedded derivatives using the
Black-Scholes model based on the historical volatility of its common stock over
the past three years. The fair value of derivative instruments are re-measured
each quarter.
During the three months ended December 31, 2005 and the year ended September 30,
2005, the Company issued convertible notes payable containing embedded
derivatives. The Company received $1,855,000 from these convertible notes and
issued 1,855,000 shares of common stock valued at $1,539,100 for three years of
prepaid interest. The carrying value of these convertible notes payable as of
December 31, 2005 was $230,418. The carrying value will be increased each
quarter over the three year period as the accretion related to the embedded
derivative is recorded until the carrying value equals the face value of
$1,855,000. As of December 31, 2005, the derivative instruments had a total fair
value of $2,926,527.
(9) COMMON STOCK
During the three months ended December 31, 2005, the Company issued 9,287,246
shares of common stock as follows:
o 325,000 shares were issued for services performed for a value of
$327,000.
o 694,840 shares were issued in connection with debt and interest on
notes payable for a value of $784,416.
o 1,050,000 shares were issued for $700,000 in cash, net commission of
$35,000
o 7,217,406 shares were issued for conversion of Series A and B Preferred
Stock.
Common Stock Subject to Redemption
The Company has 32,000 common shares outstanding that are redeemable at the
option of the holder with a redeemable value of $96,000. The Company has not yet
been released from the $96,000 obligation. In accordance with SFAS No. 150,
Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity, the redemption value of the redeemable shares has been
recorded as a liability.
Q-12
Common Stock Options and Warrants
As of December 31, 2005, 9,341,649 of the 13,266,649 outstanding options and
warrants were vested with a weighted average exercise price of $0.60 per share.
For the three months ended December 31, 2005, 657,500 options were issued with
an exercise price of $1.00 per share. These options were issued in connection
with debt and SecureAlert Series A Preferred stock.
(10) SEGMENT INFORMATION
The Company is organized into two business segments based primarily on the
nature of the Company's products. The Reagents segment is engaged in the
business of manufacturing and marketing medical diagnostic stains, solutions and
related equipment to hospitals and medical testing labs. The SecureAlert segment
is engaged in the business of developing, distributing and marketing mobile
emergency and personal security systems to distributors and consumers. Other
(unallocated) loss consists of research and development, selling, general and
administrative expenses related to the Company's corporate activities, including
remote health monitoring and market and business development activities.
The following table reflects certain financial information relating to each
reportable segment for each of the three-month periods ended December 31, 2005
and 2004:
Three Months Ended
December 31,
-------------- ---------------
2005 2004
-------------- ---------------
Sales to external customers:
SecureAlert $ 77,060 $ 68,945
Reagents 142,433 138,574
-------------- ---------------
$ 219,493 $ 207,519
-------------- ---------------
Net (loss) income from operations :
SecureAlert $ (1,349,620) $ (552,671)
Reagents 23,830 14,314
Other (unallocated) (2,119,963) (777,469)
-------------- ---------------
$ (3,445,753) $ (1,315,826)
-------------- ---------------
Identifiable assets:
SecureAlert 879,205
Reagents 306,310
Other (unallocated) 802,863
--------------
$ 1,988,378
==============
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(11) SUBSEQUENT EVENTS
Subsequent to December 31, 2005, the Company has entered into the following
agreements:
o $400,000 of the Convertible Promissory Bridge Notes have been redeemed
by the Company pursuant to the terms of the Notes for $418,668 in cash.
o The Board of Directors have approved the issuance of Series C Preferred
Stock. Series C Preferred Stock has the following features: cost of
$1.12 per share, an annual dividend of 8%, voting rights and one share
of Series C Preferred Stock converts into two shares of common stock.
o The Company has received $500,000 from two entities from the issuance
of debt convertible into Series C Preferred Stock.
Q-13
Experts
Our consolidated balance sheet as of September 30, 2005 and the consolidated
statements of operations, stockholders' deficit, and cash flows, for the year
then ended, included in this prospectus have been audited by Hansen, Barnett &
Maxwell, independent registered public accounting firm, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of Hansen, Barnett & Maxwell as experts in auditing and accounting.
Our consolidated statements of operations, stockholders' deficit, and cash
flows, for the year ended September 30, 2004, included in this prospectus have
been audited by Tanner LC, independent registered public accounting firm, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of Tanner LC as experts in auditing and accounting.
Legal matters
The validity of the Shares offered hereby will be passed upon for us by Durham
Jones & Pinegar, P.C., 111 East Broadway, Suite 900, Salt Lake City, Utah 84111.
72
Table of Contents
Summary about RemoteMDx Inc.
and this offering 5
Risk factors 10
Use of proceeds 19
Determination of offering price 19
Description of business 20 RemoteMDx, Inc.
Management's discussion and analysis
or plan of operation 31 10,348,110
Forward-looking statements 38 SHARES
Convertible Notes 39
Convertible Bridge Notes 39 COMMON STOCK
5% Convertible Debenture 40
Selling Shareholders 41 ____________________
Plan of distribution 51
Regulation M 52 PROSPECTUS
Legal Proceedings 53
Directors, executive officers, promoters and ___________________
control persons 53
Commission's position on indemnification February __, 2006
for Securities Act liabilities 55
Security ownership of certain beneficial
owners and management 56
Description of common stock 58
Certain relationships and related
Transactions 61
Market for common equity and related
stockholder matters 62
Executive compensation 65
Changes in and disagreements with
accountants on accounting and
financial disclosure 67
Index to financial statements 71
Experts 72
Legal matters 72
____________________
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Dealer Prospectus Delivery Obligation. Until
[a date which is 90 days from the effective date
of this prospectus], all dealers that effect
transactions in these securities, whether or
not participating in this offering, may be
required to deliver a prospectus. This is in
addition to the dealers' obligation to deliver
a prospectus when acting as underwriters and
with respect to their unsold allotments or
subscriptions.
PART II. Information Not Required in the Prospectus
Item 24. Indemnification of Directors and Officers
Our Bylaws provide, among other things, that our officers or directors are not
personally liable to us or to our stockholders for damages for breach of
fiduciary duty as an officer or director, except for damages for breach of such
duty resulting from (a) acts or omissions which involve intentional misconduct,
fraud, or a knowing violation of law, or (b) the unlawful payment of dividends.
Our Bylaws also authorize us to indemnify our officers and directors under
certain circumstances. We anticipate we will enter into indemnification
agreements with each of our executive officers and directors pursuant to which
we will agree to indemnify each such person for all expenses and liabilities
incurred by such person in connection with any civil or criminal action brought
against such person by reason of their being an officer or director of the
Company. In order to be entitled to such indemnification, such person must have
acted in good faith and in a manner reasonably believed to be in or not opposed
to the best interests of the Company and, with respect to criminal actions, such
person must have had no reasonable cause to believe that his conduct was
unlawful.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to our directors, officers or controlling persons pursuant
to the foregoing provisions, or otherwise, we have been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable.
Item 25. Other Expenses of Issuance And Distribution
We will pay all expenses in connection with the registration and sale of the
common stock by the selling shareholders. The estimated expenses of issuance and
distribution are set forth below.
Registration Fees $ 1,093.00
Transfer Agent Fees 1,000.00
Costs of Printing and Engraving 5,000.00
Legal Fees 25,000.00
Accounting Fees 25,000.00
-------------
Total Estimated Costs of Offering $ 57,093.00
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Item 26. Recent Sales of Unregistered Securities
Recent Sales of Unregistered Securities
The following information summarizes certain information for all securities we
have sold during the past two fiscal years without registration under the
Securities Act.
In each of these transactions the securities were issued to individuals or
entities that were "accredited investors" as that term is used in Rule 501 under
Regulation D of the Securities Act, and the issuance of the securities was
accomplished without registration under the Securities Act in reliance on the
exemptions from the registration requirements of the Securities Act afforded by
Section 4(2), including Rule 506 of Regulation D under the Securities Act.
Subsequent to September 30, 2005, the Company entered into various different
financing transactions. These transactions are described in the Current Report
on Form 8-K of the Company filed with the Commission on November 2, 2005 and
November 23, 2005.
II-1
On December 27, 2005, the Company entered into $500,000 principal amount of
convertible bridge notes with two entities. These notes bear interest at 8% and
are convertible into a proposed new series of preferred stock of the Company to
be established by the Board of Directors. The rights and preferences of this new
series of preferred stock are under negotiation.
For the Three Months Ended December 31, 2005
During the three months ended December 31, 2005, the Company issued 9,287,246
shares of common stock without registration of the offer and sale of the
securities under the Securities Act of 1933, as amended, as follows:
- 325,000 sares were issued for services performed with a value of
$327,000;
- 694,840 shares were issued in connection with debt and interest on
notes payable for a value of $784,416;
- 1,050,000 were issued for $700,000 in cash, net of $35,000 of
commissions; and
- 7,217,406 shares were issued for conversion of Series A and B
Preferred Stock.
Fiscal Year 2005
During the year ended September 30, 2005, we issued 13,733,804 shares of common
stock without registration of the offer and sale of the securities under the
Securities Act of 1933, as amended, as follows:
- 3,995,154 shares were exchanged for debt and accrued interest of
$2,626,522;
- 1,043,519 shares were issued in consideration of reduction in
related-party debt of $563,500 plus $77,554 of accrued interest;
- 5,148,641 shares were issued for services in the amount of
$2,822,911;
- 953,895 shares were issued upon the conversion of 2,578 shares of
Series A Preferred Stock of the Company; and
- 2,592,595 shares were issued upon the conversion of 466,667 shares
of Series B Preferred Stock of the Company.
- See footnote 16 to the financial statements for a discussion of
financing activities subsequent to September 30, 2005.
Fiscal Year 2004
During the year ended September 30, 2004, we issued 6,514,873 shares of common
stock without registration of the offer and sale of the securities under the
Securities Act of 1933, as amended, as follows:
- 1,271,573 shares were issued for cash proceeds of $591,638;
- 22,427 shares were exchanged for debt and accrued interest of
$33,640;
- 689,229 shares were issued in connection with the exercise of
stock options in the amount of $372,184;
- 740,741 shares were issued upon exercise of options in
consideration of reduction in related-party debt of $400,000;
Ii-2
- $1,106,412 of convertible debentures. These debentures can be
converted at the election of the debenture holders into
approximately 1,400,000 shares of common stock (at an assumed
conversion price of $1.00/share). The conversion price is 80% of
the per share price of the next qualified offering. A qualified
offering is an offering exceeding $5,000,000 of net proceeds to
the Company.
- 1,157,500 shares were issued for services; and
- 2,633,403 shares were issued upon the conversion of 7,097 shares
of Series A Preferred Stock of the Company.
In each of these transactions the securities were issued to individuals or
entities that were "accredited investors" as that term is used in Rule 501 under
Regulation D of the Securities Act, or the issuance of the securities was
accomplished without registration under the Securities Act in reliance on other
exemptions from the registration requirements of the Securities Act afforded by
Section 4(2), including Rule 506 of Regulation D under the Securities Act.
Item 27. Exhibits
Copies of the following documents are filed with this registration statement as
exhibits:
Exhibit No. Document
3.01(1) Articles of Incorporation dated July 27, 1995 and Articles
of Amendment dated September 8, 1997 (incorporated by
reference to Exhibit 3 to the Company's Registration
Statement and Amendments thereto on Form 10-SB, filed
October 1, 1997).
3.01(2) Articles of Amendment dated July 31, 2001to Articles of
Incorporation, and changing name of Company to RemoteMDx,
Inc. (filed previously as an exhibit to the Company's
Annual Report on Form 10-KSB for the year ended September
30, 2005, and incorporated by reference herein).
3.01(3) Certificate of Amendment to Designation of Rights and
Preferences dated June 15, 2001, adopting Amended and
Restated Designation of Rights and Preferences of Series A
10% Convertible Non-Voting Preferred Stock (filed
previously as an exhibit to the Company's Annual Report on
Form 10-KSB for the year ended September 30, 2005, and
incorporated by reference herein).
3.01(4) Articles of Amendment dated July 31, 2001 to Articles of
Incorporation adopting Designation of Rights and
Preferences of Series B Convertible Preferred Stock (filed
previously as an exhibit to the Company's Annual Report on
Form 10-KSB for the year ended September 30, 2005, and
incorporated by reference herein).
3.01(5) Certificate of Amendment dated January 16, 2002 to
Designation of Rights and Preferences Related to Series A
10% Cumulative Convertible Preferred Stock of RemoteMDx,
Inc., adopting Third Amended and Restated Designation of
Rights and Preferences of Series A 10% Convertible
Non-Voting Preferred Stock (incorporated by reference to
Exhibit 3 to the Annual Report on Form 10-KSB of the
Company filed January 22, 2002).
3.01(6) Certificate of Amendment dated December 16, 2003 to
Designation of Rights and Preferences Related to Series A
10% Cumulative Convertible Preferred Stock of RemoteMDx,
Inc., increasing number of shares of Series A Preferred to
40,000 (filed previously as an exhibit to the Company's
Annual Report on Form 10-KSB for the year ended September
30, 2005, and incorporated by reference herein).
3.01(7) Articles of Amendment to the Articles of Incorporation of
the Company dated October 3, 2005, increasing number of
shares of Common Stock to 100,000,000 (filed previously as
an exhibit to the Company's Annual Report on Form 10-KSB
for the year ended September 30, 2005, and incorporated by
reference herein).
II-3
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3.02 Bylaws of the Company adopted August 28, 1995 (incorporated
by reference to Exhibit 3 to our Registration Statement on
Form 10-SB, filed October 1, 1997)
5 Opinion of Durham Jones & Pinegar, P.C. *
10.01 Form of Senior Secured Convertible Promissory Note in
aggregate principal amount of $500,000 dated December 27,
2005 (filed previously as an exhibit to the Company's
Annual Report on Form 10-KSB for the year ended September
30, 2005, and incorporated by reference herein).
10.02 1997 Stock Incentive Plan (incorporated by reference to our
Registration Statement and Amendments thereto on Form
10-SB, effective December 1, 1997).
10.03 2004 RemoteMDx Stock Option Plan (incorporated by reference
to the definitive proxy statement of the Company filed on
May 19, 2004).
10.04 Agreement for cellular service with AT&T dated October 14,
2004 (filed previously as an exhibit to the Company's
Annual Report on Form 10-KSB for the year ended September
30, 2005, and incorporated by reference herein).
10.05 Loan Agreement (as amended and extended) dated March 5,
2002 between ADP Management and the Company, effective
December 31, 2001 (filed as an exhibit to the Company's
quarterly report on Form 10-QSB for the quarter ended
December 31, 2001).
10.06 License Agreement between RemoteMDx, Inc. and SecureAlert,
Inc. as licensor and Matsushita Electric Works, Ltd., as
licensee (April 12, 2002; previously filed as an exhibit 10
to the Company's Quarterly Report on Form 10-QSB for the
quarter ended March 31, 2002).
10.07 Agreement with ADP Management, Derrick and Dalton (April
2003; previously filed as an exhibit 10 to the Company's
Quarterly Report on Form 10-QSB for the quarter ended March
31, 2003).
10.08 Form of Convertible Note Purchase Agreement between the
Company and certain investors, together with exhibits
including form of Convertible Note (previously filed as an
exhibit to the Company Current Report on Form 8-K filed on
November 2, 2005, and incorporated by reference herein).
10.09 Form of Convertible Bridge Note purchase agreement between
the Company and certain investors, together with exhibits
including form of Convertible Bridge Note (previously filed
as an exhibit to the Company Current Report on Form 8-K
filed on November 2, 2005, and incorporated by reference
herein).
10.10 Form of Debenture Purchase Agreement between the Company
and certain investors, together with exhibits including
form of Debenture and Debenture Registration Rights
Agreement (previously filed as an exhibit to the Company
Current Report on Form 8-K filed on November 2, 2005, and
incorporated by reference herein).
10.11 Senior Secured Convertible Promissory Note, dated December
22, 2005, payable to Anasazi Partners III, LLC. (previously
filed as an exhibit to the Company's Quarterly Report on
Form 10-QSB for the quarter ended December 31, 2005, and
incorporated herein by reference).
10.12 Senior Secured Convertible Promissory Note, dated December
22, 2005, payable to Clydesdale Partners, LLC. (previously
filed as an exhibit to the Company's Quarterly Report on
Form 10-QSB for the quarter ended December 31, 2005, and
incorporated herein by reference).
10.13 Senior Secured Convertible Promissory Note, dated February
1, 2006, payable to Anasazi Partners III, LLC. (previously
filed as an exhibit to the Company's Quarterly Report on
Form 10-QSB for the quarter ended December 31, 2005, and
incorporated herein by reference).
10.14 Senior Secured Convertible Promissory Note, dated February
1, 2006, payable to Clydesdale Partners, LLC. (previously
filed as an exhibit to the Company's Quarterly Report on
Form 10-QSB for the quarter ended December 31, 2005, and
incorporated herein by reference).
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73
23.1 Consent of Tanner LC
23.2 Consent of Hansen Barnett & Maxwell
23.3 Consent of Counsel (included in Exhibit 5 Opinion Letter)*
24. Power of Attorney (see page II-4).*
_______________
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* Filed previously.
Item 28. Undertakings
Insofar as indemnification for liabilities under the Securities Act of 1933 may
be permitted to our directors, officers and controlling persons pursuant to the
provisions described above, or otherwise, we have been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by us of expenses incurred or paid by
our director, officer or controlling person in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, we will, unless in
the opinion of our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
We hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To specify in the prospectus any facts or events arising after the
effective date of the registration statement (or most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Securities and Exchange Commission pursuant to Rule 424(b)
(Section 230.4242(b) of Regulation S-B) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any additional or changed material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
II-5
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, as amended,
we certify that we have reasonable grounds to believe that we meet all of the
requirements of filing on Form SB-2 and authorized this registration statement
to be signed on our behalf by the undersigned, in the city of Salt Lake City,
Utah, on March 1, 2006.
REMOTEMDX, INC.
A Utah corporation
By: /s/David Derrick
------------------------------------
David Derrick
Its: Chief Executive Officer and Chairman
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In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following person in the capacity and on
the date stated.
/s/ James J. Dalton March 1, 2006
----------------------------------------------
James J. Dalton
President and Vice Chairman
/s/ Michael G. Acton March 1, 2006
----------------------------------------------
Michael G. Acton
Chief Financial Officer, Secretary/Treasurer
/s/ Peter McCall March 1, 2006
----------------------------------------------
Peter McCall
Director
/s/Robert E. Childers March 1, 2006
----------------------------------------------
Robert E. Childers
Director
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II-7
Exhibit List
Exhibit Description
3.01(1) Articles of Incorporation dated July 27, 1995 and Articles
of Amendment dated September 8, 1997 (incorporated by
reference to Exhibit 3 to the Company's Registration
Statement and Amendments thereto on Form 10-SB, filed
October 1, 1997).
3.01(2) Articles of Amendment dated July 31, 2001to Articles of
Incorporation, and changing name of Company to RemoteMDx,
Inc. (filed previously as an exhibit to the Company's
Annual Report on Form 10-KSB for the year ended September
30, 2005, and incorporated by reference herein).
3.01(3) Certificate of Amendment to Designation of Rights and
Preferences dated June 15, 2001, adopting Amended and
Restated Designation of Rights and Preferences of Series A
10% Convertible Non-Voting Preferred Stock (filed
previously as an exhibit to the Company's Annual Report on
Form 10-KSB for the year ended September 30, 2005, and
incorporated by reference herein).
3.01(4) Articles of Amendment dated July 31, 2001 to Articles of
Incorporation adopting Designation of Rights and
Preferences of Series B Convertible Preferred Stock (filed
previously as an exhibit to the Company's Annual Report on
Form 10-KSB for the year ended September 30, 2005, and
incorporated by reference herein).
3.01(5) Certificate of Amendment dated January 16, 2002 to
Designation of Rights and Preferences Related to Series A
10% Cumulative Convertible Preferred Stock of RemoteMDx,
Inc., adopting Third Amended and Restated Designation of
Rights and Preferences of Series A 10% Convertible
Non-Voting Preferred Stock (incorporated by reference to
Exhibit 3 to the Annual Report on Form 10-KSB of the
Company filed January 22, 2002).
3.01(6) Certificate of Amendment dated December 16, 2003 to
Designation of Rights and Preferences Related to Series A
10% Cumulative Convertible Preferred Stock of RemoteMDx,
Inc., increasing number of shares of Series A Preferred to
40,000 (filed previously as an exhibit to the Company's
Annual Report on Form 10-KSB for the year ended September
30, 2005, and incorporated by reference herein).
3.01(7) Articles of Amendment to the Articles of Incorporation of
the Company dated October 3, 2005, increasing number of
shares of Common Stock to 100,000,000 (filed previously as
an exhibit to the Company's Annual Report on Form 10-KSB
for the year ended September 30, 2005, and incorporated by
reference herein).
3.02 Bylaws of the Company adopted August 28, 1995 (incorporated
by reference to Exhibit 3 to our Registration Statement on
Form 10-SB, filed October 1, 1997)
5 Opinion of Durham Jones & Pinegar, P.C. *
10.01 Form of Senior Secured Convertible Promissory Note in
aggregate principal amount of $500,000 dated December 27,
2005 (filed previously as an exhibit to the Company's
Annual Report on Form 10-KSB for the year ended September
30, 2005, and incorporated by reference herein).
10.02 1997 Stock Incentive Plan (incorporated by reference to our
Registration Statement and Amendments thereto on Form
10-SB, effective December 1, 1997).
10.03 2004 RemoteMDx Stock Option Plan (incorporated by reference
to the definitive proxy statement of the Company filed on
May 19, 2004).
10.04 Agreement for cellular service with AT&T dated October 14,
2004 (filed previously as an exhibit to the Company's
Annual Report on Form 10-KSB for the year ended September
30, 2005, and incorporated by reference herein).
10.05 Loan Agreement (as amended and extended) dated March 5,
2002 between ADP Management and the Company, effective
December 31, 2001 (filed as an exhibit to the Company's
quarterly report on Form 10-QSB for the quarter ended
December 31, 2001).
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76
10.06 License Agreement between RemoteMDx, Inc. and SecureAlert,
Inc. as licensor and Matsushita Electric Works, Ltd., as
licensee (April 12, 2002; previously filed as an exhibit 10
to the Company's Quarterly Report on Form 10-QSB for the
quarter ended March 31, 2002).
10.07 Agreement with ADP Management, Derrick and Dalton (April
2003; previously filed as an exhibit 10 to the Company's
Quarterly Report on Form 10-QSB for the quarter ended March
31, 2003).
10.08 Form of Convertible Note Purchase Agreement between the
Company and certain investors, together with exhibits
including form of Convertible Note (previously filed as an
exhibit to the Company Current Report on Form 8-K filed on
November 2, 2005, and incorporated by reference herein).
10.09 Form of Convertible Bridge Note purchase agreement between
the Company and certain investors, together with exhibits
including form of Convertible Bridge Note (previously filed
as an exhibit to the Company Current Report on Form 8-K
filed on November 2, 2005, and incorporated by reference
herein).
10.10 Form of Debenture Purchase Agreement between the Company
and certain investors, together with exhibits including
form of Debenture and Debenture Registration Rights
Agreement (previously filed as an exhibit to the Company
Current Report on Form 8-K filed on November 2, 2005, and
incorporated by reference herein).
10.11 Senior Secured Convertible Promissory Note, dated December
22, 2005, payable to Anasazi Partners III, LLC. (previously
filed as an exhibit to the Company's Quarterly Report on
Form 10-QSB for the quarter ended December 31, 2005, and
incorporated herein by reference).
10.12 Senior Secured Convertible Promissory Note, dated December
22, 2005, payable to Clydesdale Partners, LLC. (previously
filed as an exhibit to the Company's Quarterly Report on
Form 10-QSB for the quarter ended December 31, 2005, and
incorporated herein by reference).
10.13 Senior Secured Convertible Promissory Note, dated February
1, 2006, payable to Anasazi Partners III, LLC. (previously
filed as an exhibit to the Company's Quarterly Report on
Form 10-QSB for the quarter ended December 31, 2005, and
incorporated herein by reference).
10.14 Senior Secured Convertible Promissory Note, dated February
1, 2006, payable to Clydesdale Partners, LLC. (previously
filed as an exhibit to the Company's Quarterly Report on
Form 10-QSB for the quarter ended December 31, 2005, and
incorporated herein by reference).
23.1 Consent of Tanner LC
23.2 Consent of Hansen Barnett & Maxwell
23.3 Consent of Counsel (included in Exhibit 5 Opinion Letter)*
24. Power of Attorney (see page II-4).*
_______________
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* Filed previously.
II-9
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors of Remote MDx, Inc.:
We hereby consent to the use in this Registration Statement on Form SB-2/A of
our report dated June 7, 2005 relating to the consolidated financial statements
of Remote MDx, Inc., and to the reference of our Firm in the Registration
Statement.
/s/ TANNER LC.
Salt Lake City, Utah
March 1, 2006
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Exhibit 23.2
HANSEN, BARNETT & MAXWELL
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS
AND
BUSINESS CONSULTANTS
5 Triad Center, Suite 750
Salt Lake City, UT 84180-1128
Phone: (801) 532-2200
Fax: (801) 532-7944
www.hbmcpas.com
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Remote MDx, Inc.
We consent to the use of our report dated December 22, 2005, in the Registration
Statement of Remote MDx, Inc. on Form SB-2, relating to the registration of
10,348,110 shares of common stock. We also consent to the use of our name and
the reference to us in the "Experts" section of this Registration Statement.
/s/ HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
February 27, 2006
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