Business description of AMERICANN-INC from last 10-k form

ITEM 1.       DESCRIPTION OF BUSINESS

Background of the Issuer and Its Predecessor

Nevada Health Scan, Inc. (the “Company”) will engage in the business of facilitating medical tourism by providing information on our internet website for those seeking to travel abroad for healthcare services. The website will be free. We will realize revenue by selling advertising to healthcare providers and related businesses including hotels and travel businesses.

We are in the process of further developing our medical tourism website which is www.clubmedi.co. The Company’s vision is to develop a website which will be among the most frequently visited by Americans seeking information on medical tourism. Our initial focus will be on medical tourism to Mexico and, especially, to those cities in northern Baja California which are within approximately 50 miles of San Diego, California. The website will provide general information on medical tourism and will advertise the services of Mexican physicians, dentists, clinics, and hospitals, and provide links to websites maintained by these physicians, dentists, clinics, and hospitals. It will also provide links to other providers of services which may relate to medical tourism such as travel agents, hotels, and ground transportation providers. The Company’s mission is to provide a virtual forum where Americans seeking medical or dental treatment abroad can find providers, learn more about their services and fees, and, if desired, make appointments or book travel arrangements. We will not provide healthcare, transportation, or accommodations. We will only provide a website through which services provided by others can be advertised.

Initially, our president and vice president will develop the Company’s business. Our president will design and build our website; he has previously designed and built two other websites as set forth in his resume on page 10. Our vice president will sell advertising to healthcare providers in Mexico who are trying to reach medical tourists; these ads will appear on our website. Initially we will charge advertisers a set-up fee of $500 and a monthly maintenance fee of $200. The Company also plans to work with consultants that specialize in social networking, search engine optimization (“SEO”), and other means of trafficking new users to our websites. Initially the Company will work with small, independent consultants to minimize costs. When sales and cash flows permit, the Company plans to bring more of the work in house and hire part time and/or full time employees.

The Company was incorporated in Delaware on June 25, 2010 as part of the implementation of the Chapter 11 Bankruptcy plan of reorganization of AP Corporate Services, Inc. (“AP”). AP filed for Chapter 11 Bankruptcy in September 2008 in the U.S. Bankruptcy Court for the Central District of California. AP’s plan of reorganization was confirmed by the Court on December 24, 2008 and became effective on January 4, 2009. This plan of reorganization provided, among other things, for the incorporation of the Company and the distribution of 1,085,000 shares in it to AP’s bankruptcy creditors. The shares were distributed pursuant to section 1145 of the U.S. Bankruptcy Code. As stated in the Plan of Reorganization ordered by the Court, these shares were issued “to enhance the distribution to creditors,” i.e. to enhance their opportunity to recover the losses they sustained in the AP bankruptcy. The plan of reorganization also provided for the transfer to the Company of any interest which AP retained in the development of an MRI facility in Nevada. Plans for the development of such a facility were subsequently abandoned because of lack of capital.

Medical Tourism

According to the Deloitte Center for Health Solutions report (“DCHS”)[page 24], the growth of medical tourism is driven largely by cost and consumerism. The high price of medical procedures in the United States, coupled with an increase in health

care consumerism, is prompting individuals to seek lower-cost alternatives to U.S.-based treatments.

Although the Deloitte Center for Health Solutions continues to research various aspects of the healthcare industry, the 2008 study was the last study it published which was devoted specifically to medical tourism. That study found [page 14] there were approximately 750,000 medical tourists traveling from the U.S. to other countries for medical care in 2007. That same study estimated that the number of outbound U.S. medical tourists would increase to 15,750,000 in 2017. In looking at costs the study found that $2.1 billion was spent overseas by U.S. medical tourists in 2007. This represented $15.9 billion in lost revenue for U.S. health care providers, or savings of $13.8 billion for consumers. The study projected overseas expenditures by medical tourists to reach at least $30.3 billion and possibly as high as $79.5 billion in 2017, resulting in potential revenue losses to U.S. health care providers of $228.5 to $599.5 billion.

Health care consumerism is premised on the idea that individuals should have greater control over decisions that affect their health and their medical care. Employers, health plans and policy-makers recognize that unless consumers are more engaged in decisions about their health and the costs associated with those decisions, costs will continue to soar. HSAs, high-deductible plans, and higher co-pays are prompting patients to act more like consumers. In addition to providing incentives for patients to take a more active role in their care, many health plans provide resources to help facilitate patient decision making. Furthermore, the Internet has become a significant source of information for patients who want to learn more about their medical conditions, diagnostic results, and treatment options. [page 4]

According to the DCHS report [page 4], the impact of dramatically rising U.S. health care costs is felt in every household and by every company. Even consumers with employer sponsored health insurance are increasingly considering outbound medical tourism as a viable care option: As their plan deductibles increase, many of the services available in outbound settings may be purchased under the deductible limit, thus conserving the consumer’s funds available for healthcare.

The DCHS study found [page 6] that healthcare costs in Mexico are about 25% to 35% of U.S. costs and that Mexico enjoys a high volume of U.S. visitors due to its proximity to the U.S. The Company plans to initially focus on medical tourism to the Mexican state of Baja California. Tijuana, Baja California’s largest city, is also the second largest city in Mexico and lies just 17 miles south of San Diego. Because of its size it is home to a large community of healthcare providers, and because of its proximity to San Diego it is already a major center for medical tourism. From this base the Company expects to gradually grow its business across Mexico.

The Company intends to enter the medical tourism industry in Mexico through the development of a web-based platform which will provide information on and feature paid advertisements for hospitals, clinics, physicians, dentists, and other healthcare providers. We will also sell advertising to hotels and apartments that are close to healthcare providers and to transportation providers and we expect to realize revenue from internet links to travel agents, hotels, and transportation providers.

Since we are selling advertising to businesses hoping to reach individuals planning healthcare travel to Mexico, it is important to our business that travel to Mexico remain open, legal, and desirable. Nationals of more than 70 countries and jurisdictions, including the U.S. and Canada, can enter Mexico as tourists or business visitors without a visa. Tourists and business visitors can stay in Mexico for up to 180 days. There are no added permits, visas, etc. required of foreign nationals receiving medical care in Mexico. The U.S. State Department has issued a travel warning concerning violence in Mexico, and this can be expected to deter some visitors. However, the warning notes that millions of U.S. citizens safely visit Mexico each year including more than 150,000 who cross the border every day. So long as substantial numbers of Americans continue to travel to Mexico, we expect healthcare providers to be willing to advertise. (See Risk Factor 6)

Competition

We will compete with a wide variety of companies in the medical tourism industry. These competitors range from other general travel and healthcare websites to established hospitals, medical tourism facilitators, and travel agencies, to other healthcare providers in the US and abroad. In addition, as the medical tourism industry grows and expands into other sectors such as travel and insurance, better financed and established entities may expand into, acquire, invest or continue to consolidate within the industry, thus increasing the competitive pressures we face.

ITEM 1A.      RISK FACTORS

Our business is subject to numerous risk factors, including the following:

1.   

We have no operating history and no revenues or earnings from operations.

We have no assets and no revenues at this time. We will, in all likelihood, sustain operating expenses without corresponding revenues, at least until the launch of our website. This may result in us incurring a net operating loss that will increase continuously until we are able to generate advertising revenue from our website. There is no assurance that we can sell advertising, or if we do, that it will be sufficient to meet our expenses.

2.

We may not be able to continue to operate as a going concern.

Our auditors have expressed the opinion that we may not be able to continue as a going concern. Their opinion letter and the notation in the financial statements indicate that we do not have revenues, cash reserves, or other material assets and that we are relying on interest free loans and advances from our president and our vice president to meet our limited operating expenses. As of the date hereof, these loans and advances total $4,750. We may become insolvent if we are unable to pay our debts in the ordinary course of business as they become due.

3.

Our officers are not obligated to finance our operations and if they cease to

do so we may not be able to continue in business.

As noted above, we are relying on interest free loans and advances from our president and our vice president to meet our operating expenses. These officers have orally agreed to advance $25,000 to the Company, should that amount be needed, and may be willing to advance more, if needed. However, this is a voluntary agreement. They are not obligated to provide financial assistance to the Company. To date they have loaned the Company $4,750. If they fail to provide sufficient financing to carry the Company to the point of a break even cash flow, the Company will need to seek alternative financing, either debt or equity. There can be no assurance that such financing will be available or, if available, that it can be obtained on acceptable terms. If financing cannot be obtained on acceptable terms the Company will, most probably, cease operations.

4.

Our website may not be commercially accepted which will adversely affect

our revenues and profitability.

Our ability to establish our current website and to launch new ones bears risk. If we are not able to gain acceptance in the medical tourism and health care markets, we may not be able to generate meaningful revenue and may not be able to continue to operate. Our commercial success will also depend on our ability to market our websites which may require additional capital. If we cannot market effectively and we do not attract significant visitors to our websites, it will be difficult to recognize advertising revenue.

5.

The competitive market in which we operate may make it very difficult to

develop our medical tourism business.

Our focused industry is relatively new and is fragmented with low barriers to entry. This may have an adverse effect on our ability to compete and recognize advertising revenue since we may be competing against larger, more established entities, entities with existing expertise in the medical industry and entities with expertise in launching new websites. Such entities may be better funded or staffed than we are and may be able to enter the market more rapidly.

6.

Our success is dependent upon the willingness of advertisers to advertise with

us, and this is dependent upon our readers’ perception of the ease and safety

of travel to Mexico.

Since we are selling advertising, advertisers must believe that their target audience is able and willing to travel to Mexico. Currently, nationals of more than 70 countries and jurisdictions, including the U.S. and Canada, can enter Mexico as tourists or business visitors, can receive medical treatment there, and can stay in Mexico for up to 180 days. If this ease of entry were restricted it would have a negative effect on our business and possibly destroy the business. The U.S. State Department has issued a travel warning concerning violence in Mexico, and this can be expected to deter some visitors. However, the warning notes that millions of U.S. citizens safely visit Mexico each year including more than 150,000 who cross the border every day. If foreign nationals did not feel safe traveling to Mexico and many stopped traveling to Mexico it would have a negative effect on our business and might well result in the failure of our business.

7.

If we obtain financing, existing shareholder interests may be diluted.

If we raise additional funds by issuing equity or convertible debt securities, the percentage ownership of our shareholders will be diluted. We currently have warrants outstanding which may make it more difficult for us to raise financing and may cause the market price of our common stock to decline because of the indeterminable overhang that is created if the exercise price represents a discount to market. In addition, any new securities could have rights, preferences and privileges senior to those of our common stock. Furthermore, we cannot assure you that additional financing will be available when and to the extent we require it or that, if available, it will be on acceptable terms.

8.   Our success is dependent on our three officers and directors who have other full

     time employment, have limited experience, and will only devote limited time (part

     time) to working for the Company, all of which makes our future even more

     uncertain.

Dean Konstantine, Howard Behling and Josephine Resma, our three officers and directors, will serve without salary while maintaining other employment, at least until such time as the company has been profitable for three consecutive months. As of the date hereof, Mr. Konstantine and Ms. Resma are devoting no more than one hour per week to the affairs of the Company. Mr. Behling is spending approximately eight hours per week on the affairs of the Company, the development of its website, and the search for advertisers. Notwithstanding the limited availability of our three officers and directors, the loss of the services of any one of them would adversely affect development of our business and its likelihood of continuing in operation. We do not maintain key-man life insurance on any of our officers and directors and have no present plans to obtain this insurance. 

9.     Our president is also our principal shareholder and he will be able

       to approve all corporate actions without shareholder consent and will

       control our Company.

Our principal shareholder, president, and a director, Dean Konstantine, currently owns approximately 62% of our common stock. Because of this, he will exercise complete control over the Company and have the ability to make decisions

regarding, (i) whether to issue common stock and preferred stock, including decisions to issue common and preferred stock to himself; (ii) employment decisions, including his own compensation arrangements, and (iii) whether to enter into material transactions with related parties. In addition, he will be able to elect all of the members of our board of directors. He may transact corporate business requiring shareholder approval by written consent, without soliciting the votes of other shareholders. Moreover, our vice president and a director, Howard Behling, currently owns approximately 31% of our common stock; thus two of our shareholders, officers, and directors, Mr. Konstantine and Mr. Behling, together own a total of approximately 93% of our common stock.

10.

We do not expect to pay dividends for the foreseeable future, and we may never

pay dividends. Investors seeking cash dividends should not purchase our stock.

We currently intend to retain any future earnings to support the development of our business and do not anticipate paying cash dividends in the foreseeable future. Our payment of any future dividends will be at the discretion of our Board of Directors after taking into account various factors, including but not limited to our financial condition, operating results, cash needs, growth plans and the terms of any credit agreements that we may be a party to at the time. In addition, our ability to pay dividends on our common stock may be limited by state law. Accordingly, investors seeking cash dividends should not purchase our common stock.

11.    Our Common Stock may never be publicly traded and holders may have no ability

       to sell their shares.

There is no established public trading market for our shares of Common Stock, and there is no assurance that our Common Stock will be accepted for listing on the OTC Bulletin Board or in any other trading system in the future. There can be no assurance that a market for our Common Stock will be established or that, if established, a market will be sustained. Therefore, if you purchase our Common Stock you may be unable to sell the shares. Accordingly, you should be able to bear the financial risk of losing your entire investment.

Only market makers can apply to quote securities. A market maker who desires to initiate quotations in the OTC Bulletin Board system must complete an application (Form 211) (unless an exemption is applicable) and by doing so, will have to represent that it has satisfied all applicable requirements of the Securities and Exchange Commission Rule 15c2-11 and the filing and information requirements promulgated under the Financial Industry Regulatory Authority ("Finra") Bylaws. The OTC Bulletin Board will not charge us a fee for being quoted on the service. Finra rules prohibit market makers from accepting any remuneration in return for quoting issuers' securities on the OTC Bulletin Board or any similar medium. Finra will review the market maker's application (unless an exemption is applicable). If cleared, it cannot be assumed by any investor that any federal, state or self-regulatory requirements other than certain Finra rules and Rule 15c2-11 have been considered by Finra. Furthermore, the clearance should not be construed by any investor as indicating that Finra, the Securities and Exchange Commission, or any state securities commission has passed upon the accuracy or adequacy of the documents contained in the submission.

The OTC Bulletin Board is a market maker or dealer-driven system offering quotation and trading reporting capabilities - a regulated quotation service - that displays real-time quotes, last-sale prices, and volume information in OTC equity securities. The OTC Bulletin Board securities are not listed and traded on the floor of an organized national or regional stock exchange. Instead, OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting market makers or dealers in stocks.

12.   Our shareholders may face significant restrictions on the resale of our

      Common Stock due to state "blue sky" laws.

There are state regulations that may adversely affect the transferability of our Common Stock. We have not registered our Common Stock for resale under the securities or "blue sky" laws of any state. We may seek qualification or advise our shareholders of the availability of an exemption. However, we are under no obligation to register or qualify our Common Stock in any state or to advise the shareholders of any exemptions.

Current shareholders, and persons who desire to purchase the Common Stock in any trading market that may develop in the future, should be aware that there might be significant state restrictions upon the ability of new investors to purchase the Common Stock.

Blue sky laws, regulations, orders, or interpretations place limitations on offerings or sales of securities if such securities represent "cheap stock" previously issued to promoters or others. Our officers and directors, because they received stock at a price of $.0001 for each share, may be deemed to hold "cheap stock." These limitations typically provide, in the form of one or more of the following limitations, that such securities are:

        (a) Not eligible for sale under exemption provisions permitting sales without registration to accredited investors or qualified purchasers;

        (b) Not eligible for the transaction exemption from registration for non-issuer transactions by a registered broker-dealer;

        (c) Not eligible for registration under the simplified small corporate offering registration (SCOR) form available in many states;

        (d) Not eligible for the "solicitations of interest" exception to securities registration requirements available in many states;

        (e) Not permitted to be registered or exempted from registration, and thus not permitted to be sold in the state under any circumstances.

        Virtually all 50 states have adopted one or more of these limitations, or other limitations or restrictions affecting the sale or resale of stock of "cheap stock" issued to promoters or others. Specific limitations on such offerings have been adopted in:

                  Alaska           Nevada               Tennessee

                  Arkansas         New Mexico           Texas

                  California       Ohio                 Utah

                  Delaware         Oklahoma             Vermont

                  Florida          Oregon               Washington

                  Georgia          Pennsylvania

                  Idaho            Rhode Island

                  Indiana          South Carolina

                  Nebraska         South Dakota

Any secondary trading market which may develop, may only be conducted in those jurisdictions where an applicable exemption is available or where the shares have been registered. Current shareholders and persons who desire to purchase the Common Stock in any trading market that may develop in the future, should be aware that we are under no obligation to register the shares on behalf of our shareholders under the Securities Act of 1933, as amended.

13.   Our Common Stock will be subject to significant restriction on resale due to

      federal penny stock restrictions.

The Securities and Exchange Commission has adopted rules that regulate broker or dealer practices in connection with transactions in penny stocks. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities

registered on certain national securities exchanges or quoted on the Nasdaq system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange system). The penny stock rules require a broker or dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document prepared by the Securities and Exchange Commission that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker or dealer also must provide the customer with bid and offer quotations for the penny stock, the compensation of the broker or dealer, and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer's account. The penny stock rules also require that prior to a transaction in a penny stock not otherwise exempt from such rules, the broker or dealer must make a special written determination that a penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction.

       These disclosure requirements will have the effect of reducing the level of trading activity in any secondary market for our stock, and accordingly, shareholders of our Common Stock will find it difficult to sell their securities, if at all.