1. Purpose and Scope of Phase Two
Phase Two represents the operational activation and first-year execution phase of the Company. Phase Two is undertaken only if management determines that Phase One has successfully validated market demand, regulatory readiness, and operational feasibility.
Phase Two includes, without limitation:
- Activation of clinical operations
- Hiring of medical, diagnostic, and operational staff
- Commencement of patient care and diagnostic services
- Onboarding of employer and individual members
- Scaling of operational, technological, and administrative systems
Phase Two is conditional and is not guaranteed to occur.
2. Phase Two Capital Amount
Phase Two contemplates up to $6,000,000 in additional capital (the "Phase Two Capital").
Phase Two Capital is intended to fund:
- The first full year of live medical operations
- Staffing, diagnostic services, and operational expenses
- Working capital and financial reserves
Phase Two Capital is expected to be sourced primarily through debt financing, including potential SBA-backed lending through the U.S. Small Business Administration, as well as other financing sources as determined by the Company.
There is no assurance that such financing will be obtained on acceptable terms or at all.
3. Conditions Precedent to Phase Two
The Company will not proceed with Phase Two unless management determines, in its sole discretion, that the following conditions have been satisfied:
- Demonstrated employer and/or membership demand
- Signed employer agreements, LOIs, or binding commitments
- Completion of facility construction and compliance readiness
- Regulatory clearance to commence clinical operations
- Operational readiness of diagnostic and technology systems
- Availability of Phase Two Capital on acceptable terms
Failure to meet these conditions may result in Phase Two being delayed, modified, or abandoned.
4. Use of Phase Two Capital
Phase Two Capital is expected to be allocated substantially as follows. Actual expenditures may vary materially.
4.1 Clinical and Diagnostic Staffing
Phase Two Capital will be used to hire and compensate medical and diagnostic personnel, including but not limited to:
- Physicians (MD/DO)
- Nurse Practitioners and Physician Assistants
- Registered Nurses and Medical Assistants
- Imaging technologists
- Clinical leadership and oversight
Phase Two Capital is structured to fund approximately twelve (12) months of staffing costs, including salaries, benefits, payroll taxes, credentialing, and onboarding.
4.2 Diagnostic Operations Activation
Phase Two includes the operational activation of diagnostic services, including X-ray and MRI.
Capital may be used for:
- Diagnostic equipment lease payments
- Service and maintenance contracts
- Safety monitoring and compliance
- Imaging supplies and operational overhead
Continuation or expansion of diagnostic services is subject to utilization, financial performance, and regulatory requirements.
4.3 Clinic Operations and Support Functions
Phase Two Capital will fund non-clinical operations required to support care delivery, including:
- Front desk and patient services
- Care coordination and administrative support
- Operations management
- Billing and membership administration
These functions are necessary for live operations but do not constitute clinical care.
4.4 Technology, Systems, and Compliance
Capital may be used to activate and operate systems required for clinical care and compliance, including:
- Electronic health record systems
- Scheduling and patient communication platforms
- Billing and membership management systems
- Reporting, analytics, and compliance monitoring
- Cybersecurity and data protection
4.5 Marketing, Employer Onboarding, and Growth
Phase Two Capital may be used for marketing and growth initiatives directly related to live operations, including:
- Employer onboarding and activation
- Membership enrollment programs
- Retention and engagement initiatives
- Expansion of employer partnerships
Marketing expenditures are expected to scale in alignment with operational capacity.
4.6 Working Capital, Debt Service, and Reserves
Phase Two Capital includes allocations for:
- General working capital
- Cash flow smoothing during ramp-up
- Debt service coverage
- Regulatory and operational contingencies
5. Staffing Assumptions
Phase Two staffing projections are based on an estimated workforce of approximately 25 employees, including clinical, diagnostic, and operational personnel.
Actual staffing levels may vary based on:
- Patient volume
- Employer participation
- Regulatory requirements
- Financial performance
There is no guarantee that staffing levels or costs will align with projections.
6. Relationship to Phase One Capital
Phase Two Capital is separate and distinct from Phase One Capital.
- Phase One Capital is risk capital used for validation and preparation
- Phase Two Capital is used for live operations and scaling
- Phase Two financing may include debt obligations senior to Phase One capital
Participation in Phase One does not guarantee participation in Phase Two financing unless expressly documented.
7. Risk Factors Specific to Phase Two
Phase Two involves materially increased risk, including but not limited to:
- Clinical liability exposure
- Staffing shortages or turnover
- Regulatory enforcement actions
- Diagnostic utilization variability
- Debt service obligations
- Delays in membership ramp-up
- Increased operating expenses
Investors acknowledge that Phase Two materially increases financial, regulatory, and operational exposure.
8. No Guarantee of Profitability or Returns
Phase Two Capital deployment does not guarantee:
- Profitability
- Cash flow sufficiency
- Successful scaling
- Return of capital
- Exit opportunities
All capital deployed in Phase Two is subject to substantial risk.
9. No Offer of Securities
This document is provided solely for informational and diligence purposes.
It does not constitute an offer to sell or a solicitation of an offer to buy securities.
Any offering of securities or debt will be made only pursuant to definitive agreements and applicable law.
10. Governing Understanding
This Phase Two disclosure does not amend or supersede any operating agreement, subscription agreement, loan agreement, or other definitive documentation.
In the event of a conflict, the terms of the applicable definitive agreement shall govern.