10-K 1 accelera10k12312012.htm CURRENT REPORT accelera10k12312012.htm


 
UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-K
 
[X] Annual Report Pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934
 
for the fiscal year ended December 31, 2012
 
 Transition Report Under Section 13 or 15(D) of the Securities Exchange Act of 1934
 
for the transition period from _______________ to _______________
 
Commission File Number:  000-53392
 
ACCELERA INNOVATIONS, INC.
(Exact name of small Business Issuer as specified in its charter)
 
Delaware
26-2517763
(State or other jurisdiction of
(IRS Employer Identification No.)
incorporation or organization)
 
   
20511 Abbey Drive
 
Frankfort, Illinois
60423
(Address of principal executive offices)
(Zip Code)
 
Issuer's telephone number, including area code: (866) 866-0758

___________________________________________________ 
Former address if changed since last report
 
Securities registered under Section 12(b) of the Exchange Act:   None
 
Securities registered under Section 12(g) of the Exchange Act:
 
Common Stock, par value $0.0001 per share
 
    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  þ  No  ¨
 
    Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o  No o
 
    Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ
 
    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large Accelerated Filer
o
 
Accelerated Filer
o
 
Non-Accelerated Filer o
(Do not check if a smaller reporting company)
 
Smaller Reporting Company
þ
 
    Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  o Yes  þ No
 
    State issuer's revenues for its most recent fiscal year: $0.00
 
As of March 31, 2013 there were 21,511,812 shares of the registrant’s common stock outstanding.
 


 
 
 
 

TABLE OF CONTENTS
 
PART I
   
         
ITEM 1.
 
BUSINESS
    3
ITEM 1A.
 
RISK FACTORS
  14
ITEM 1B.
 
UNRESOLVED STAFF COMMENTS
  32
ITEM 2.
 
PROPERTIES
    32
ITEM 3.
 
LEGAL PROCEEDINGS
  32
ITEM 4.
 
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   32
         
PART II
   
         
ITEM 5.
 
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
   32
ITEM 6.
 
SELECTED FINANCIAL DATA
  36
ITEM 7.
 
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
  36
ITEM 7A.
 
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  45
ITEM 8.
 
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    45
ITEM 9.
 
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
   46
ITEM 9A(T).
 
CONTROLS AND PROCEDURES
    46
ITEM 9B.
 
OTHER INFORMATION
    47
         
PART III
   
         
ITEM 10.
 
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    47
ITEM 11.
 
EXECUTIVE COMPENSATION
  49
ITEM 12.
 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  51
ITEM 13.
.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
    51
ITEM 14
 
PRINCIPAL ACCOUNTANT FEES AND SERVICES
    54
         
PART IV
   
         
ITEM 15.
 
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
  55
         
SIGNATURES
        57


 
2

 
 
PART I
ITEM 1.  BUSINESS
 
This report contains forward-looking statements. In some cases, these statements may be identified by terminology such as “anticipates,” “believes,” “continue,” “estimates,” “expects,” “may,” “plans,” “potential,” “predicts,” “should,” “will,” and other comparable terminology. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to develop our operations, our ability to satisfy our obligations, our ability to raise capital as necessary, our ability to generate revenues and pay our operating expenses, our ability to consummate the acquisition of additional assets,  economic, political and market conditions and fluctuations, government and industry regulation, U.S. and global competition, and other factors.  Most of these factors are difficult to predict accurately and are generally beyond our control.  You should consider the areas of risk described in connection with any forward-looking statements that may be made herein.  Readers are cautioned not to place undue reliance on these forward-looking statements and readers should carefully review this report in its entirety, including the risks described in Item 1A - "Risk Factors" as well as the risk factors described in our other filings with the Securities and Exchange Commission.  Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to update any of our forward-looking statements. These forward-looking statements speak only as of the date of this report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business. “We,” “us,” “our,” the “Company,” Accelerated Acquisitions IV, Inc.,” and “Accelera” as used in this report refer to Accelera, Inc., a Delaware corporation..

None of the Company’s securities are registered for resale with the Securities and Exchange Commission. The outstanding shares of common stock may only be resold through registration under the Securities Act of 1933, or under an applicable exemption from registration.

From inception (April 29, 2008), Accelera Innovations, Inc. (formally known as Accelerated Acquisitions IV, Inc.) was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objectives were to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. The Company has since identified healthcare technology, obtained exclusive rights and is now a healthcare technology service provider.  We are no longer a blank check company.

On April 29, 2008, the Registrant sold 5,000,000 shares of Common Stock to Accelerated Venture Partners, LLC for an aggregate investment of $4,000.00. The Registrant sold these shares of Common Stock under the exemption from registration provided by Section 4(2) of the Securities Act.

On June 13, 2011, Synergistic Holdings, LLC (“Purchaser”) agreed to acquire 17,000,000 shares of the Company’s common stock par value $0.0001 for a price of $0.0001 per share. At the same time, Accelerated Venture Partners, LLC agreed to tender 3,750,000 of their 5,000,000 shares of the Company’s common stock par value $0.0001 for cancellation. Following these transactions, Synergistic Holdings, LLC owned 93.15% of the Company’s 18,250,000 issued and outstanding shares of common stock par value $0.0001 and the interest of Accelerated Venture Partners, LLC was reduced to approximately 6.85% of the total issued and outstanding shares. Simultaneously with the share purchase, Timothy Neher resigned from the Company’s Board of Directors and John Wallin was simultaneously appointed to the Company’s Board of Directors. Such action represents a change of control of the Company.

The Purchaser used their working capital to acquire the Shares. The Purchaser did not borrow any funds to acquire the Shares. Prior to the purchase of the shares, the Purchaser was not affiliated with the Company. However, the Purchaser will be deemed an affiliate of the Company after the share purchase as a result of their stock ownership interest in the Company. The purchase of the shares by the Purchaser was completed pursuant to written Subscription Agreements with the Company. The purchase was not subject to any other terms and conditions other than the sale of the shares in exchange for the cash payment.

On June 16, 2011, the Company entered into a Consulting Services Agreement with Accelerated Venture Partners LLC (“AVP”), a company controlled by Timothy J. Neher. The agreement requires AVP to provide the Company with certain advisory services that include reviewing the Company’s business plan, identifying and introducing prospective financial and business partners, and providing general business advice regarding the Company’s operations and business strategy in consideration of (a) an option granted by the Company to AVP to purchase 2,250,000 shares of the Company’s common stock at a price of $0.0001 per share (the “AVP Option”) (which was immediately exercised by the holder) subject to a repurchase option granted to the Company to repurchase the shares at a price of $0.0001 per share in the event the Company fails to complete funding as detailed in the agreement subject to the following milestones:

 
3

 
 

Milestone 1
Company’s right of repurchase will lapse with respect to 80% of the shares upon securing $5 million in available cash from funding;
   
Milestone 2
Company’s right of repurchase will lapse with respect to 10% of the Shares upon securing $10 million in available cash (inclusive of any amounts attributable to Milestone 1);
   
Milestone 3
Company’s right of repurchase will lapse with respect to 10% of the Shares upon securing $15 million in available cash (inclusive of any amounts attributable to Milestone 2);
 
and (b) cash compensation at a rate of $50,000 per month. The payment of such compensation is subject to Company’s achievement of certain designated milestones, specifically, cash compensation of $400,000 is due consultant upon the achievement of Milestone 1, $400,000 and $400,000 upon the achievement of Milestone 2 and $400,000 upon the achievement of Milestone 3. Upon achieving each Milestone, the cash compensation is to be paid to consultant in the amount then due at the rate of $50,000 per month. The total cash compensation to be received by the consultant is not to exceed $1,200,000 unless Accelera receives an amount of funding in excess of the amount specified in Milestone 3. If the Company receives equity or debt financing that is an amount less than Milestone 1, in between any of the above Milestones or greater than the above Milestones, the cash compensation earned by the Consultant under this Agreement will be prorated according to the above Milestones.
 
The Company also has the option to make a lump sum payment to AVP in lieu of all amounts payable thereunder.

On August 22, 2011, Accelera Innovations, Inc. (the “Company”) entered into a Licensing Agreement (“Licensing Agreement”) with Synergistic Holdings, LLC (“Licensor”) pursuant to which the Company was granted an exclusive, non-transferrable worldwide license for proprietary Internet-based, software (“Accelera Technology”) that is intended to improve the functionality and performance of healthcare services by making clinical healthcare data available to healthcare consumers. This relevant data is intended to serve as the backbone for self-management tools that will allow these same healthcare consumers to facilitate the self-management portion of their doctor-prescribed care plan and focus on the mostly costly disease states. This is intended to be accomplished through the proprietary technology, which is designed to identify and measures the severity of high/low stratification of the sickness level based upon evidence-based clinical and medical rules and delivers best-of-breed tools to insurance companies, doctors, hospitals, and employers.

Except for the rights granted under the License Agreement, Licensor retains all rights, title and interest to Licensor and any additions thereto—although the License includes the Company’s right to utilize such additions.

The term of the License commences on the date of the Licensing Agreement and continues for thirty (30) years, provided that the Licensee is not in breach or default of any of the terms or conditions contained in this Agreement. In addition to other requirements, the continuation of the License is conditioned on the Company generating net revenues in the normal course of operations or the funding by the Company of specified amounts for qualifying development and commercialization expenses related to the Accelera Technology. In addition, the Company is required to fund certain specified expenses related to the deployment of Accelera Technology as specified in the License Agreement. The license is terminated upon the occurrence of events of default specified in the License Agreement and outlined as followed:

If any of the Parties are in breach or default of the terms or conditions contained in this Agreement and do not rectify or remedy that breach or default within 90 days from the date of receipt of notice by the other party requiring that default or breach to be remedied, then the other party may give to the party in default a notice in writing terminating this Agreement.

Licensee may, at its option, terminate this Agreement at any time by doing the following:

By ceasing to use the Accelera Technology facilitated by any Licensed Products in their entirety or by giving sixty (60) days prior written notice to Licensor of such cessation and of Licensee’s intent to terminate, and upon receipt of such notice, Licensor may immediately begin negotiations with other potential licensees and all other obligations of Licensee under this Agreement will continue to be in effect until the date of termination. By tendering payment of all accrued royalties and other payments due to Licensor as of the date of the notice of termination and evidencing to the Licensor that provision has been made for any prospective royalties and other payments to which Licensor may be entitled after the date of termination.

Licensor may terminate the License Agreement if Licensee is in breach or default of the terms or conditions contained in the Agreement and does not rectify or remedy that breach or default within 90 days from the date of receipt of notice by Licensor requiring that default or breach to be remedied, then Licensor, may alter License granted by this Agreement with regards to its exclusivity, its territorial application and restrictions on its application.
 
 
4

 

OVERVIEW
 
Accelera Innovations, Inc. (“Accelera”), a Delaware corporation, is a healthcare service company which will initially focus on its technology assets that were licensed to the Company by our majority shareholder Synergistic Holdings, LLC (“Licensor”), a privately-held company organized under the laws of Illinois, pursuant to which the Company was granted a thirty (30) year exclusive, non-transferrable worldwide license for proprietary Internet-based, software platform that is fully functional in its current state (“Accelera Technology”) that is designed to provide interoperable technology that is intended to improve the quality of care while reducing the cost as described below.
 
LICENSED TECHNOLOGY OVERVIEW

1.   Data Forms -  Topical Network Data Warehouse Architecture
2.   Axiom – Healthcare Specific Business Rules Engine.
3.  
Kinetic Forms – A Dynamic Web Page Generator.
4.  
VT Secure – Enterprise Security Framework
5.  
Patient Portal
6.  
Self-Management Disease Modules
7.  
Provider Portal
8.  
Private Label Applications
 
SOFTWARE DESCRIPTION

The Accelera Health Care Framework / Multi Vertical Health Care (MVHC) Technology comprises a suite of eight separate technologies described below;

Health Care Framework, Security, Business Rules, Data Integration, Patient Assessment, Medical Alerts, Biometric integration, Secure communication and networking, Data Mining on Large Data Sets (Mega Data).
 
Security Framework, Integrated into the Accelera’s Healthcare Framework is designed to provide enterprise level application and data security.
 
Assessment Engine: For clinical and self-health care and Wellness management.

Parallel Processing Data Mining Engine:  Patient Identification, Medical Informatics, Content Personalization. 

Suite of Products:

Data Forms –Topical Network, a data forming technology and framework that is designed to organize and efficiently deliver relevant information for large data sets (Mega Data) and which can ingest any data format into well-organized data structure designed specifically to communicate the other components of the Accelera Framework.

Axiom – Business Rules Engine is designed specifically for Healthcare which is data mining engine. Axiom is a parallel or simultaneous processing rules engine designed to apply complex rule-sets on very large dimensional data input to produce multiple result outputs.

Kinetic Forms – Dynamic Webpage Generator, a dynamic web based assessment engine that is intended to interfaces with data forms and Axiom.

VT Secure – Integrated into the Accelera Healthcare Framework, is designed to provide enterprise level security and is intended to protect applications and data and is designed to provide performance and scalability for secure medical data mining.

Patient Portal - Consumer-facing internet-based technology that is designed to encompass the following:
 
 
·
Connect between patient and provider through a fully secure two-way Patient Portal, including After Visit Summaries, patient messaging and care plan adherence alerts based on relevant health care protocols
 
·
Display relevant patient and care plan information in easy-to-understand onscreen and printable displays for patients and triaged formatting for caregivers.
 
·
Provide patient behavior modifications self-management modules 
 
·
Allow third party access into the patient portal
 
·
Create Personal Health Records (PHR) that are personalized based on patient condition for patient care and messaging
 
 
 
 
5

 
 
 
Self-Management Disease Modules - Provider and Consumer-facing internet-based technology that is designed to encompass the following:

·  
Interactive disease management tools that focus on chronic health conditions. It is designed to include content indexed to specific triggers within a disease state
·  
Personalized based on  National Drug Code (NDC), and Current Procedural Terminology (CPT4) codes
·  
Proprietary messaging based on CMS Medicare/Medicaid established triggers
·  
Valid and reliable behavioral health triggers that facilitate care plan adherence and compliance 
 
Provider Portal - Provider-facing internet-based technology that is designed to encompass the following:
 
 
·
Dashboard access to Patient Portal inputs at the patient level
 
·
Summary access to disease management adherence & compliance messaging alerts
 
·
Direct input into patient health records
 
·
Direct recommendations to the patient

Private Label Applications

Accelera EMR- A certified Electronic Medical Record application designed to be used primarily in physician offices to automate the patient’s clinical chart and meet the ARRA (Federal Mandated Meaningful Use) criteria.
 
Accelera PM -The Practice Management application designed to be used primarily in physician offices to automate the physician’s revenue cycle management system.
 
Accelera Patient Portal - The Patient Portal application designed to be used as a communication tool between patient and physician office staff. This application is intended to allow the patient to access their medical record information in a secure environment.
 
Accelera HIE - The Health Information Exchange application is intended to allow  providers and payors of healthcare to exchange secure data by creating the continuum of care for the patient, and decreasing healthcare cost.
 
Accelera ACO - The Accountable Care Organization application needed to operate an ACO environment. This application is designed to offers the ACO business the ability to report to CMS the usage of Medicare benefits and is intended to provide tools to lower the cost of patient care.
 
Accelera HIS - The Hospital Information System application is designed to includes all applications to manage most hospital information systems. The department applications included in the HIS are as follows:
 
Patient Master; Appointments, Outpatient Management; Inpatient Management; Emergency Department; Patient Billing; Claims Management; Provider Fee Management; Accounts Receivable; Duplicate Registration; Medical Records; System Master; System Configuration, Resource Scheduler; CPOE; Clinical Decision Support System; Clinical Documentation; Barcode Medication Administration; Laboratory Management System; Radiology System; PACS; Pharmacy Management System; Materials/Supply Management System; Operating Room Management System; Nursing Management; Blood Bank System; Dietary Management System; Hospital Patient Portal.
 
Accelera, intends to provide its cloud based healthcare services through monthly or yearly subscription agreements (“software-as-a-service” also known as “SaaS”) to the healthcare industry. The Company intends on positioning itself as a technology and service solution for providers and payers such as the hospitals, medical offices, medical insurance companies, Accountable Care Organizations, Patient Centered Medical Homes, and Provider Service Networks who are seeking to create an interoperable technology platform that is patient-centric.
 
The coordinated care would begin with the office visit using the Accelera Practice Management and Electronic Medical Record applications. The provider may also access disparate patient consults and share the patient’s record using the Accelera Health Information Exchange and Portal.  When the patient is admitted to the hospital setting, all of the functions are intended tobe automated using the Accelera Hospital Information System. The physician would continue to have full access to the patient’s information to receive accurate and efficient information. If the primary care physician is part of an Accountable Care Organization, then those reports required by Center for Medicare and Medicaid will be created and distributed using the Accelera Accountable Care Organization application.

 
 
 
6

 
 

The Accelera Patient Management Record is designed to identify patients with preventable, yet escalating associated costs, then directs intense online self-management services to improve the quality-of-life for the patient and deliver more effective health information. Patients would be electronically triaged using the Center for Medicare and Medicaid (CMS) rule-set for disease management, as well as proprietary evidence-based disease management rules. These rules are based on clinical standards from major health organizations.. This is intended to allow providers, as well as patients, to monitor care through targeted interventions. The technology platform is intended to allow healthcare providers to anticipate patient care needs, motivate patient compliance, activate evidence-based standards of care, and improve efficiency.
 
The Accelera Analytic product is designed for potential customers that include healthcare payers, provider organizations, government entities worldwide, and employer groups. Accelera products are designed to identify, analyze, and minimize healthcare risk by data mining and predictive analysis while containing costs and improving the quality of care. Accelera also intends to develop modeling software to predict medical costs and help improve the financing, organization, and delivery of health services.
 
The Accelera Security solution is designed to reduce or stop the security breach at the point of care, by auditing the user and encasing the applications in a discrete shell.  Without proper access, the application will separate the data elements from each other, patient name will not be associated with demographic or clinical information.   Patient data is split into two parts, the patient identifier is separated from the clinic/medical data and both are encrypted. An encrypted data key unlocks the dual encryption bringing the information together and is intended to increase patients’ confidence in the information technology utilized.

The Accelera Solution is designed to improve patient care, reduce costs, eliminate redundant data entry, improve operational efficiency, but most importantly, bring together long term needs of the caregivers and is intended to satisfy the business requirements of the healthcare enterprise.
 
 The intended benefits of our solutions for potential customers include: 

·  
Lowers administration costs through a less invasive call-back system - email alerts, text messages, online alerts

·  
A benefit of batch health care analytics is the use of "predictive modeling across multiple clinical conditions.  This process is designed to identify undiagnosed conditions for patients within an insurer's patient population, or suggest interventions to prevent conditions from developing.

·  
Reducing occurrences and  cost related to a healthcare data breaches.

·  
Reducing the hardware environment and cost by using our cloud technology.

·  
Increased Mobility.

·  
Improving patient care and safety.

·  
Helping healthcare organizations maintain their market positions and meet their financial commitments.

Products

Accelera intends to offers the following products and services:

Accelera Patient Management Record includes the following modules:

Accelera CareLink

After Visit Summary:
A summation of a patient's diagnosis, prescribed medications, test results, upcoming lab tests and procedures, and physician recommendations indexed to the latest evidence-based health content which is intended to deliver the right information at the right time.
 
 
 
 
7

 
 
 
Personal Health Record (PHR):
Integrated and pre-populated electronic record that are designed to allow patients and providers to coordinate care. The PHR is designed to be exported, in part or in its entirety, to a third party of the patient’s choosing.
 
Permission/Export:
This feature is intended to allow family members or other healthcare professionals the ability to access a patient PHR, After Visit Summaries and supporting content. This access can be controlled by the patient to allow segmented access which can have time limits, diagnosis & Rx parameters, or healthcare encounter checkpoints.

Condition-based Self-management Module:
This module is designed to deliver patients via the web self-management modules in the following areas:
 
·
Diabetes
·
Chronic obstructive pulmonary disease (COPD)
·
Coronary artery disease (CAD)
·
Asthma
·
Maternity
·
Medication compliance
·
Weight management
·
Smoking cessation
·
Pain management
·
Depression

These online modules are designed to allow patients to follow their doctor-prescribed clinical care plan and identify behavioral gaps that reduce adherence to this care plan.

Accelera PathFinder Products
 
img1
These products are geared towards healthcare providers such as doctors, nurses, and hospitals. The Accelera PathFinder products are designed to work in conjunction with the Accelera CareLink products and cannot stand alone.

 
 
 
8

 
 

Accelera PathFinder

Health Messaging

Two-way patient/provider compliance messaging that is intended to enables all parties to securely communicate concerning targeted healthcare behaviors in a configurable management tool.
 
·
 
Rx re-order
·
 
drug-to-drug interactions
·
 
lab result notification
·
 
upcoming lab test notification
·
 
appointment reminders
·
 
out-of-compliance reminders
·
 
behavioral notifications
·
 
motivation and goal information
 
Accelera CaseIt - Case identification and stratification technology

Healthcare data inputs are assimilated to identify the care plan gaps with a data triage engine. Accelera CaseIT is intended to serve as the central data hub to integrate evidence-based rules such as Healthcare Effectiveness Data and Information Set (HEDIS) CMS rules,

Accelera Analytics
 
Real-time health care analytics are programs that are intended to analyze clinical information at the point of care and support health providers as they make prescriptive decisions. Accelera’s real-time systems are designed to be “active knowledge systems, which use two or more items of patient data to generate case-specific advice

Batch health care analytics is a technical application that is designed to retrospectively evaluates population data sets (i.e. records of patients in a large medical system, or claims data from an insured population). These evaluations can be used to supplement disease management or population health management efforts.
 
Accelera Analytic product is designed for potential customers that include healthcare payers, provider organizations, government entities worldwide, and employer groups. Accelera products are intended to help you identify, analyze, and minimize healthcare risk while containing costs and improving the quality of care. Accelera also intends develop modeling software to predict medical costs and help improve the financing, organization, and delivery of health services.
 
The Accelera Analytic engine is designed to help healthcare organizations better assess and reduce their risk from catastrophic perils such as hurricanes, earthquakes, floods, tornadoes, and tsunamis. This includes risk not only from physical damage but also from direct and contingent business interruption losses across the entire network.
 
Accelera Security
 
The Accelera Security is designed to provide a unified platform for managing security and systems compliance across all clients and servers regardless of location or network connectivity.
 
The application is intended to prevent end users whether on-site, remote or off-line from copying or transmitting patient data to external devices or unauthorized locations.
 
Accelera EMR and PM
 
The Accelera Electronic Medical Record (EMR) and Practice Management application is intended to provide a comprehensive solution for medical groups and physician enterprises, whether they are independent or part of an integrated network. The practice management solution is designed to give physician groups the flexibility to manage their business under many different reimbursement models. The solution is designed to include risk management, managed care capabilities, and a clinical system for managing patient care. Additional capabilities to help accelerate cash flow; reduce cash flow and increase productivity included decision support, data quality analysis and electronic data interchange.

 
 
 
9

 
 

Accelera HIE and Portal
 
The Accelera Health Information Exchange (HIE) and Portal, is designed to link all health care data such as diagnosis, medications, laboratory results, patient behavioral health, radiology films, patient and doctor to the data repository. Besides increasing accuracy these applications are intended to help alleviate patient frustration with having to provide duplicate information from one setting of care to another; thereby enhancing customer satisfaction. The HIE unites disparate systems across rural and metropolitan locations, converting the data into useful clinical dashboards to help comply with preventive care guidelines and develop ACO’s.
 
Accelera HIS
 
The Accelera Hospital Information System solution is intended to automate the operation of individual departments and their respective functions within the inpatient environment. These hospital based transaction and decision support systems form the core of systems that in conjunction with other tools designed to directly support clinical decision making, are intended to help streamline the care process over the continuum of care. They include applications for patient care, laboratory, pharmacy, radiology, surgery, materials management, emergency department, financials and management decision support.
 
Accelera ACO
 
Accelera Accountable Care Organization (ACO) application is a tool designed to accurately report to CMS (Centers of Medicare and Medicaid Services) the usage of provider claims and reimbursement. The tool also is designed to analyze ways to improve care and lower cost across the ACO.
 
img2
 
Accelera’s differentiating factor, as mentioned above, is how we intend to securely integrate the virtual world into our overall strategies. We intend to use cloud technology to continuously get closer to the patient; respond to application issues within minutes and connect with other providers and payers.

 
 
 
10

 
 
 
Our keys to success over the next five years are:
 
 
·
Offer providers, the Accelera Security tool, as a stand -alone application and end fraudulent activity in the healthcare vertical.
 
 
·
Data- Mine significant patient populations, over a short window of hours, to determine hospital acquired infections post discharge. Then reporting the data to CMS and influencing the Medicare payment by fiscal year 2013.
 
 
·
Enhancing Telemedicine using our cloud based Health Information Exchange.
 
 
·
Influence patient’s lives and successfully managing chronic disease using the Accelera Patient Management Record.
 
Target Market Segment Strategy

Accelera, intends to markets its cloud based software-as-a-service solutions to the healthcare industry. Accelera intends to provide  technology and service solutions  to providers and payers such as the hospitals, medical offices, medical insurance companies, ACOs, Patient Centered Medical Homes, and PSN’s who are seeking to create an interoperable technology platform that is patient-centric.

Accelera’s solution is designed to be a complete suite of integrated applications, the immediate separation of data if a breach takes place and the ability for a provider or payer to provide a tool to manage chronic disease.
 
Strategies
 
 
·
Focus resources on selling the strongest solutions within growing markets to key executives where existing personal relationships exist and local market penetration could  be  high, Accelera Analytics.
 
 
·
Create a viral, perpetuating client referral environment by turning potential customers into advocates.
 
 
·
Evaluate potential client relationships to identify opportunities to structure long term commitments that could eventually expand the Accelera’s growth.
 
 
·
Target geographic areas where Accelera product market share could be strong.  Develop marketing programs  and brand awareness campaigns to gain penetration within competing hospitals.
  
 
·
Increase Sales involvement of Product Consultants and Product Management through a team selling approach.
 
 
·
Develop targeted competitor replacement campaigns with aggressive incentives.
 
 
·
Sale and grow market share of key solutions.
 
 
·
Build spicalized sales and marketing teams to market the ACO and HIE application at the state level.
 
 
·
Market to pharmaceutical organizations for Accelera HIE and clinical trials.
 
 
·
Connect a group of Emergency departments in a local region to the Accelera HIE application to report and increase public health awareness.
 
 
 
11

 
 
Telemarketing
 
 
·
Campaigns promoting Accelera solutions will be implemented.  Leads will be loaded, distributed and tracked through closure within the customer relations management “CRM”.
 
Trade Shows and Associations
 
 
·
Targeted state trade associations and provide an ideal opportunity to develop relationships, identify opportunities, network and create awareness of Accelera solutions at the local and national level.   Account executives will participate in conferences, attend meetings, sponsor events, and pursue speaking opportunities.
 
Intellectual Property

We rely on a combination of copyright, trademark and trade secret laws, as well as confidentiality procedures and contractual restrictions, to establish and protect our proprietary rights. These laws, procedures and restrictions provide only limited protection. We currently have no issued patents or pending patent applications. In the future, we may file patent applications, but patents may not be issued with respect to these patent applications, or if patents are issued, they may not provide us with any competitive advantages, may not be issued in a manner that gives us the protection that we seek and may be successfully challenged by third parties.

We endeavor to enter into agreements with our employees and contractors and with parties with whom we do business in order to limit access to and disclosure of our proprietary information. We cannot be certain that the steps we have taken will prevent unauthorized use or reverse engineering of our technology. Moreover, others may independently develop technologies that are competitive with ours or that infringe on our intellectual property. The enforcement of our intellectual property rights also depends on any legal actions against these infringers being successful, but these actions may not be successful, even when our rights have been infringed.
 
Furthermore, effective patent, trademark, trade dress, copyright and trade secret protection may not be available in every country in which our solutions are available over the Internet. In addition, the legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain and still evolving.
 
Health Plan Competitors
 
We believe the health care industry is fragmented and rapidly evolving. Our competitors vary in size, scope and breadth of the products and services they offer. We offer a software-as-subcribtion program that provides health care services similar to or directly in competition with health care services offered by hospital groups, electronic medical record service providers and practice management service providers.
 
We believe that success in the health care industry, particularly in the areas of primary and chronic care, is dependent upon the ability of providers to:
 
 
provide easy access, convenience, and a quality experience to consumers;
 
 
lower the cost of health care by streamlining operations, lowering operating expenses, and reducing errors, and human intervention;
 
 
automate the entire health care lifecycle and integrate the business and care aspects of health care; and
 
 
use technology to facilitate evaluation and diagnosis, treatment, after-care management, and billing and collections.
 
Our principal competitors include the following:

Kaiser Permanente (KP) has rolled out over the past   10 years an electronic medical record used by 100% of its physicians which offers a Patient Information Management System to all patients. It includes after visit summaries, patient messaging, and appointment scheduling. The system, while robust, is based only within the KP organization and is not portable for patients.
 
BlueCross/BlueShield Association has been rolling out personal health records with claims-history as the data feed since 2007. These products do not include integrated disease management services.
 
 
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Electronic Medical Record Competitors
 
Allscripts is one of the leading EMR companies which offer large volumes of data generated by high-acuity care. They provide customized views so individual clinicians can find the data they need to make timely, accurate decisions. This service has limited patient view into the data. A recent step towards entering this space occurred when Allscripts installed their EMR software at Sloan-Kettering Cancer Center to address the Joint Commission on Accreditation of healthcare Organizations (JCAHO) for hospital organizations to do a better job of patient supervision handoffs. But as of yet, the patient cannot see an online version of doctor recommended care as Acelera intends to provide.
 
Practice Management Competitors
 
Allscripts, eClinicalworks & Epic focus their business on the practice side of the equation. Recently, these companies are bundling patient module which a patient logs onto the system to access patient data.
 
Some of our current or potential competitors are larger and have more resources than we do. Many of our competitors enjoy substantial competitive advantages, such as greater name recognition, longer operating histories, and larger marketing budgets, as well as substantially greater financial resources. In addition, these traditional health care providers are more widely accepted and known to consumers, whereas Accelera’s business model and service has yet to gain widespread recognition and acceptance. Furthermore, because of these advantages, existing and potential customers might accept any of our competitor’s services, even if they may be inferior to ours. If our potential customers choose to use any of these competitive offerings, our revenue could decrease and we could be required to make additional expenditures to compete more effectively.
 
Recent Industry Developments

On February 17, 2009, President Barack Obama signed the American Recovery & Reinvestment Act (ARRA), otherwise known as the Stimulus Bill or Meaningful Use incentives, which provides financial incentives to physicians and hospitals that prove they have adopted and used Electronic Health Record (EHR) technology to improve both the quality and cost-effectiveness of patient care. Studies demonstrate that effective use of EHRs reduces medical errors, improves clinical quality and leads to better patient outcomes by enabling real-time access to patient records, medical information and best practices, and electronic connectivity to all healthcare stakeholders, including patients.

In addition to other components focused on economic stimulus, the ARRA law provides for what is expected to be almost $30 billion in funds supporting health information technology utilization. The total includes $2 billion in discretionary funds for supporting programs and an estimated $27 billion for incentives to be distributed through Medicare and Medicaid beginning in 2011 to ensure widespread adoption and use of interoperable healthcare IT systems, such as the EHR. Physicians who have not adopted certified EHR systems by 2014 will have their Medicare reimbursements reduced by up to 5 percent beginning in 2015. Hospitals that do not successfully demonstrate meaningful use in 2015 and beyond will have a payment adjustment in their Medicare reimbursement.

With the Meaningful Use incentives, the Centers for Medicare and Medicaid Services (CMS) will pay physicians up to $44,000 or $64,000 (depending which program they participate in) over five years, beginning in 2011, for deploying and using a certified EHR to care for patients. Hospital incentives under ARRA are tied to several factors but begin with a base payment of $2 million. The law is expected to ignite significant job growth in the information technology sector and, according to a Congressional Budget Office review of the law's impact, drive up to 90 percent of US physicians to adopt EHRs in the next decade.

 
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GOVERNMENT REGULATIONS

As a participant in the healthcare industry, our operations and relationships, and those of our customers, are regulated by a number of federal, state and local governmental entities. The impact of this regulation on us is direct, to the extent we are ourselves subject to these laws and regulations, and is also indirect in that, in a number of situations, even though we may not be directly regulated by specific healthcare laws and regulations, our products must be capable of being used by our customers in a manner that complies with those laws and regulations. Inability of our customers to do so could affect the marketability of our products or our compliance with our customer contracts, or even expose us to direct liability under the theory that we had assisted our customers in a violation of healthcare laws or regulations. Because our business relationships with physicians are unique and the healthcare technology industry as a whole is relatively young, the application of many state and federal regulations to our business operations and to our customers is uncertain. Indeed, there are federal and state fraud and abuse laws, including anti-kickback laws and limitations on physician referrals, and laws related to distribution and marketing, including off-label promotion of prescription drugs that may be directly or indirectly applicable to our operations and relationships or the business practices of our customers. It is possible that a review of our business practices or those of our customers by courts or regulatory authorities could result in a determination that could adversely affect us. In addition, the healthcare regulatory environment may change in a way that restricts our existing operations or our growth. The healthcare industry is expected to continue to undergo significant changes for the foreseeable future, which could have an adverse effect on our business, financial condition and results of operations. We cannot predict the effect of possible future legislation and regulation.
 
 
ITEM 1A.  RISK FACTORS
 
Before you invest in our securities, you should be aware that there are various risks. You should consider carefully these risk factors, together with all of the other information included in this Current Report on Form 8-K, as well as elsewhere in our SEC filings before you decide to purchase our securities. Independent of the risk factors we list, you should further be aware that none of the Company’s securities are registered for resale with the Securities and Exchange Commission, so they can only be purchased under an applicable exemption from registration or if the Company registers the securities under the Securities Act of 1933. If any of the following risks and uncertainties develop into actual events, our business, financial condition or results of operations could be materially adversely affected.

Our independent auditors have expressed substantial doubt about our ability to continue as a going concern, which may hinder our ability to continue as a going concern and our ability to obtain future financing.

In their report dated December 31, 2012, our independent auditors stated that our financial statements for the period from inception April 29, 2008 through December 31, 2012 were prepared assuming that we would continue as a going concern. Our ability to continue as a going concern is an issue raised as a result of recurring losses from operations and cash flow deficiencies since our inception. We continue to experience net losses. Our ability to continue as a going concern is subject to our ability to generate a profit and/or obtain necessary funding from outside sources, including obtaining additional funding from the sale of our securities, increasing sales or obtaining loans and grants from various financial institutions where possible. If we are unable to continue as a going concern, you may lose your entire investment.

We were formed April 29, 2008 and have a limited operating history and, accordingly, you will not have any basis o
n which to evaluate our ability to achieve our business objectives.

We are a development stage company with limited operating results to date. Since we do not have an established operating history or regular sales yet, you will have no basis upon which to evaluate our ability to achieve our business objectives.

The absence of any significant operating history for us makes forecasting our revenue and expenses difficult, and we may be unable to adjust our spending in a timely manner to compensate for unexpected revenue shortfalls or unexpected expenses.

As a result of the absence of any operating history for us, it is difficult to accurately forecast our future revenue. In addition, we have limited meaningful historical financial data upon which to base planned operating expenses. Current and future expense levels are based on our operating plans and estimates of future revenue. Revenue and operating results are difficult to forecast because they generally depend on our ability to promote and sell our services. As a result, we may be unable to adjust our spending in a timely manner to compensate for any unexpected revenue shortfall, which would result in further substantial losses. We may also be unable to expand our operations in a timely manner to adequately meet demand to the extent it exceeds expectations.

 
 
 
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Our limited operating history does not afford investors a sufficient history on which to base an investment decision.

We are currently in the early stages of developing our business. There can be no assurance that at this time that we will operate profitably or that we will have adequate working capital to meet our obligations as they become due.
 
Investors must consider the risks and difficulties frequently encountered by early stage companies, particularly in rapidly evolving markets. Such risks include the following:
 
 
Competition
 
Ability to anticipate and adapt to a competitive market;
 
Ability to effectively manage expanding operations; amount and timing of operating costs and capital expenditures relating to expansion of our business, operations, and infrastructure; and
 
Dependence upon key personnel to market and sell our services and the loss of one of our key managers may adversely affect the marketing of our services.
 
Our business strategy may not be successful and we may not successfully address these risks. In the event that we do not successfully address these risks, our business, prospects, financial condition, and results of operations could be materially and adversely affected and we may not have the resources to continue or expand our business operations.

Conflicts of interest between the Company and its officer and director may impede the operational ability of the Company.
 
Our sole director and CEO, Mr. John Wallin is engaged in outside business activities, he has been the CEO and director of Synergistic Holdings, LLC since 2009, the Company’s majority shareholder and Licensor of the Company’s technology, which may result in a conflict of interest in allocating his time between our operations and his other business activities. Although Mr. Wallin has a full time employment agreement with the Company his other business affairs may require him to devote more substantial amounts of time to such affairs, it could limit his ability to devote time to our affairs and could have a negative impact on our ability efficiently operate the Company as a result, Mr. Wallin will be in a position to make business decisions adverse to Accelera Innovations to the benefit of Synergistic Holdings
 
We are a development stage company and are substantially dependent on a third party

The Company is a development stage Company and is currently substantially dependent upon technology licensed from Synergistic Holdings, LLC. The events or circumstances that may prevent the accomplishment of our business objectives, include, without limitation, (i) the fact that, if we do not raise a minimum of US $5,000,000 of additional funding by July 13, 2012 that was verbally extended by Licensor to June 13, 2013, an additional $7,500,000 by April 13, 2014, an additional $10,000,000 April 13, 2015 and an additional $7,500,000 by April 13, 2016 equaling the minimum funding requirement of $30,000,000 for the deployment of its licensed technology over the next three years it will lose its rights to the technology. If the license is terminated upon the occurrence of events of default specified in the Agreement and outlined as followed:

If any of the Parties are in breach or default of the terms or conditions contained in this Agreement and do not rectify or remedy that breach or default within 90 days from the date of receipt of notice by the other party requiring that default or breach to be remedied, then the other party may give to the party in default a notice in writing terminating this Agreement.

Licensee may, at its option, terminate this Agreement at any time by doing the following:

By ceasing to use the Accelera Technology facilitated by any Licensed Products in their entirety or by giving sixty (60) days prior written notice to Licensor of such cessation and of Licensee’s intent to terminate, and upon receipt of such notice, Licensor may immediately begin negotiations with other potential licensees and all other obligations of Licensee under this Agreement will continue to be in effect until the date of termination. By tendering payment of all accrued royalties and other payments due to Licensor as of the date of the notice of termination and evidencing to the Licensor that provision has been made for any prospective royalties and other payments to which Licensor may be entitled after the date of termination.

Licensor may terminate the Agreement if Licensee is in breach or default of the terms or conditions contained in this Agreement and does not rectify or remedy that breach or default within 90 days from the date of receipt of notice by Licensor requiring that default or breach to be remedied, then Licensor, may alter License granted by this Agreement with regards to its exclusivity, its territorial application and restrictions on its application. 

 
 
 
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Licensor may terminate the Agreement if Licensee is in breach or default of the terms or conditions contained in this Agreement and does not rectify or remedy that breach or default within 90 days from the date of receipt of notice by Licensor requiring that default or breach to be remedied, then Licensor, may alter License granted by this Agreement with regards to its exclusivity, its territorial application and restrictions on its application.  If the Company loses its licensing rights to the technology our business plan will fail and investors may lose their entire investment.
 
We have no profitable operating history and May Never Achieve Profitability

From inception (April 29, 2008) through December 31, 2012, the Company has an accumulated deficiency during the development stage of $5,289,615 notwithstanding the fact that the principals of the Company have worked without salary and the Company has operated with minimal overhead. We are an early stage company and have a limited history of operations and have not generated revenues from operations since our inception. We are faced with all of the risks associated with a company in the early stages of development. Our business is subject to numerous risks associated with a relatively new, low-capitalized company engaged in our business sector. Such risks include, but are not limited to, competition from well-established and well-capitalized companies, and unanticipated difficulties regarding the marketing and sale of our services. We may not ever generate significant commercial sales or achieve profitability. Should this be the case, our common stock could become worthless and investors in our common stock or other securities could lose their entire investment.
 
We have a need to raise additional capital

The Company will not be able to commercialize its technology without additional capital, if we do not raise additional funds of at least $30 million for the deployment of its licensed technology over the next three years it will lose its rights to the technology. The Company will require significant additional financing in order to meet the milestones and requirements of its Business Plan and avoid discontinuation of the License. Funding would be required for staffing, marketing, public relations and the necessary research precedent to expanding the scope of its offering to include the global market. The Company intends to seek at an aggregate of $35,000,000 in this offering through the sale of equity or convertible debt securities, the issuance of these securities could dilute existing shareholders. The Company’s funding plans include selling additional capital stock and/or borrowing to fund the aforementioned expenses. The Company intends to approach Hedge Funds, Venture Capital Groups, Private Investment Groups and other Institutional Investment Groups in its efforts to achieve future funding. It is estimated that $9,874,940 will be used for management, sales and marketing, $17,680,122 will be used for infrastructure and software fees and an estimated $4,417,978 will be spent on legal, accounting, rent and other payables leaving $3,026,960 in reserve for increased working capital.

It’s estimated the minimum amount of capital the company needs to raise over the next twelve months is $1 million to continue operations. There is no guarantee that the Company will be able to raise this or any amount of additional capital and a failure to do so would have a significant adverse effect on the Company’s ability, or would cause significant delays in its ability to address the market for content delivery and achieve its Business Plan. Neither the Company nor any of its advisors or consultants has significant experience in raising funds similar to the $35,000,000 estimated to be required.

 
 
 
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Dependence on our Management, without whose services Company business operations could cease.

At this time, our management is wholly responsible for the development and execution of our business plan. Our management is under no contractual obligation to remain employed by us. If our management should choose to leave us for any reason before we have hired additional personnel our operations may fail. Even if we are able to find additional personnel, it is uncertain whether we could find qualified management who could develop our business along the lines described herein or would be willing to work for compensation the Company could afford. Without such management, the Company could be forced to cease operations and investors in our common stock or other securities could lose their entire investment.

Our officers and director devote full time to the Company’s business.

The Company has three full-time devoted officers, based upon growth; we will employ additional management and staff.  With only three fulltime devoted officers and director the Company’s business could adversely affect the Company’s business operations and prospects for the future. Without a full-time devoted management team, the Company could be forced to cease operations and investors in our common stock or other securities could lose their entire investment.

Lack of additional working capital may cause curtailment of any expansion plans while raising capital through sale of equity securities would dilute existing shareholders’ percentage of ownership.
 
Our available capital resources will not be adequate to fund our working capital requirements based upon our present level of operations for the 12-month period subsequent to December 31, 2012. A shortage of capital would affect our ability to fund our working capital requirements. If we require additional capital, funds may not be available on acceptable terms, if at all. In addition, if we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could dilute existing shareholders. If funds are not available, we could be placed in the position of having to cease all operations.

We do not presently have a traditional credit facility with a financial institution. This absence may adversely affect our operations

We do not presently have a traditional credit facility with a financial institution. The absence of a traditional credit facility with a financial institution could adversely impact our operations. If adequate funds are not otherwise available, we may be required to delay, scale back or eliminate portions of our operations and product development efforts. Without such credit facilities, the Company could be forced to cease operations and investors in our common stock or other securities could lose their entire investment.

Our success is substantially dependent on general economic conditions and business trends, particularly in healthcare, a downturn of which could adversely affect our operations

The success of our operations depends to a significant extent upon a number of factors relating to business spending. These factors include economic conditions, activity in the financial markets, general business conditions, personnel cost, inflation, interest rates and taxation. Our business is affected by the general condition and economic stability of our customers and their continued willingness to work with us in the future. An overall decline in the demand for technology could cause a reduction in our sales and the Company could face a situation where it never achieves sales and thereby be forced to cease operations.

We will need to increase the size of our organization, and may experience difficulties in managing growth.

We are a small company with three full-time employees. We expect to experience a period of significant expansion in headcount, facilities, infrastructure and overhead and anticipate that further expansion will be required to address potential growth and market opportunities. Future growth will impose significant added responsibilities on members of management, including the need to identify, recruit, maintain and integrate managers. Our future financial performance and its ability to compete effectively will depend, in part, on its ability to manage any future growth effectively.

 
 
 
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We are subject to compliance with securities law, which exposes us to potential liabilities, including potential rescission rights.

We have offered and sold our common stock to investors pursuant to certain exemptions from the registration requirements of the Securities Act of 1933, as well as those of various state securities laws. The basis for relying on such exemptions is factual; that is, the applicability of such exemptions depends upon our conduct and that of those persons contacting prospective investors and making the offering. We have not received a legal opinion to the effect that any of our prior offerings were exempt from registration under any federal or state law. Instead, we have relied upon the operative facts as the basis for such exemptions, including information provided by investors themselves. If any prior offering did not qualify for such exemption, an investor would have the right to rescind its purchase of the securities if it so desired. It is possible that if an investor should seek rescission, such investor would succeed. A similar situation prevails under state law in those states where the securities may be offered without registration in reliance on the partial preemption from the registration or qualification provisions of such state statutes under the National Securities Markets Improvement Act of 1996. If investors were successful in seeking rescission, we would face severe financial demands that could adversely affect our business and operations. Additionally, if we did not in fact qualify for the exemptions upon which it has relied, we may become subject to significant fines and penalties imposed by the SEC and state securities agencies.

Anti-takeover effects of certain provisions of Delaware State law hinder a potential takeover of Accelera Innovations, Inc.
 
We may be subject to Section 203 of the DGCL, an anti-takeover statute. In general, Section 203 of the DGCL prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years following the time the person became an interested stockholder, unless the business combination or the acquisition of shares that resulted in a stockholder becoming an interested stockholder is approved in a prescribed manner. Generally, a “business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. Generally, an “interested stockholder” is a person who, together with affiliates and associates, owns (or within three years prior to the determination of interested stockholder status did own) 15% or more of a corporation’s voting stock. The existence of this provision would be expected to have an anti-takeover effect with respect to transactions not approved in advance by our board of directors, including discouraging attempts that might result in a premium over the market price for the shares of common stock held by our stockholders.

For purposes of Delaware law, an “interested stockholder” is any person who that (i) is the owner of 15% or more of the outstanding voting stock of the corporation, or (ii) is an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of the corporation at any time within the 3-year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder, and the affiliates and associates of such person; provided, however, that the term "interested stockholder" shall not include (x) any person who (A) owned shares in excess of the 15% limitation set forth herein as of, or acquired such shares pursuant to a tender offer commenced prior to, December 23, 1987, or pursuant to an exchange offer announced prior to the aforesaid date and commenced within 90 days thereafter and either (I) continued to own shares in excess of such 15% limitation or would have but for action by the corporation or (II) is an affiliate or associate of the corporation and so continued (or so would have continued but for action by the corporation) to be the owner of 15% or more of the outstanding voting stock of the corporation at any time within the 3-year period immediately prior to the date on which it is sought to be determined whether such a person is an interested stockholder or (B) acquired said shares from a person described in item (A) of this paragraph by gift, inheritance or in a transaction in which no consideration was exchanged; or (y) any person whose ownership of shares in excess of the 15% limitation set forth herein is the result of action taken solely by the corporation; provided that such person shall be an interested stockholder if thereafter such person acquires additional shares of voting stock of the corporation, except as a result of further corporate action not caused, directly or indirectly, by such person. For the purpose of determining whether a person is an interested stockholder, the voting stock of the corporation deemed to be outstanding shall include stock deemed to be owned by the person through (i) Beneficially owns such stock, directly or indirectly; or (ii) Has (A) the right to acquire such stock (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise; provided, however, that a person shall not be deemed the owner of stock tendered pursuant to a tender or exchange offer made by such person or any of such person's affiliates or associates until such tendered stock is accepted for purchase or exchange; or (B) the right to vote such stock pursuant to any agreement, arrangement or understanding; provided, however, that a person shall not be deemed the owner of any stock because of such person's right to vote such stock if the agreement, arrangement or understanding to vote such stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation made to 10 or more persons; or (iii) Has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting, or disposing of such stock with any other person that beneficially owns, or whose affiliates or associates beneficially own, directly or indirectly, such stock.
 
 
 
 
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The definition of the term “business combination” is sufficiently broad to cover virtually any kind of transaction that would allow a potential acquiror to use the corporation’s assets to finance the acquisition or otherwise to benefit its own interests rather than the interests of the corporation and its other stockholders.
 
The effect of Delaware’s business combination law is to potentially discourage parties interested in taking control of Accelera Innovations, Inc. from doing so if it cannot obtain the approval of our board of directors.

We incur costs associated with SEC reporting compliance.

We incur certain costs of compliance with applicable SEC reporting rules and regulations including, but not limited to attorney’s fees, accounting and auditing fees, other professional fees, financial printing costs and Sarbanes-Oxley compliance costs in an amount estimated at approximately $25,000 per year.
 
The availability of a large number of authorized but unissued shares of common stock may, upon their issuance, lead to dilution of existing stockholders.
 
We are authorized to issue 100,000,000 shares of common stock, $0.0001 par value per share, of which, as of December 31, 2012, 21,511,812 shares of common stock were issued and outstanding. We are also authorized to issue 10,000,000 shares of preferred stock, $0.0001 par value, none of which are issued and outstanding. These shares may be issued by our board of directors without further stockholder approval. The issuance of large numbers of shares, possibly at below prior investment valuations, is likely to result in substantial dilution to the interests of other stockholders. In addition, issuances of large numbers of shares may adversely affect the value of our common stock.
 
We may need additional capital that could dilute the ownership interest of investors.

We require substantial working capital to fund our business. If we raise additional funds through the issuance of equity, equity-related or convertible debt securities, these securities may have rights, preferences or privileges senior to those of the rights of holders of our common stock and they may experience additional dilution. There may not be additional financing available to us on favorable terms when required, or at all. Since our inception, we have experienced negative cash flow from operations and expect to experience significant negative cash flow from operations in the future. The issuance of additional common stock by the Company may have the effect of further diluting the proportionate equity interest and voting power of holders of our common stock.

 
 
 
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Because we do not intend to pay any cash dividends on our common stock, our stockholders will not be able to receive a return on their shares unless they sell them.
 
We intend to retain any future earnings to finance the expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them. Stockholders may never be able to sell shares when desired.  Before you invest in our securities, you should be aware that there are various risks. You should consider carefully these risk factors, together with all of the other information included in this annual report before you decide to purchase our securities. If any of the following risks and uncertainties develop into actual events, our business, financial condition or results of operations could be materially adversely affected.

There is currently no market for our securities and a market for our common stock may never develop or be listed for trading on any trading exchange.
 
The Company’s stock has not been approved for trading on the OTCBB or any other exchange and the Company has not contacted any market makers about applying on behalf of the Company. Therefore, there has not been any established trading market for our common stock and there is currently no market for our securities. Even if we are ultimately approved for trading on the OTC Bulletin Board (“OTCBB”) or other exchange, it is unknown as to the prices at which our common stock will trade if a trading market ever develops.

Our common stock is subject to the Penny Stock Regulations

Once it commences trading (if ever) our common stock could be subject to the SEC's “penny stock” rules to the extent that the price remains less than $5.00. Those rules, which require delivery of a schedule explaining the penny stock market and the associated risks before any sale, may further limit your ability to sell your shares.

The SEC has adopted regulations, which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share. Our common stock currently has no “market price” and when and if a trading market develops, may fall within the definition of penny stock and subject to rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000, or annual incomes exceeding $200,000 or $300,000, together with their spouse).

For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser's prior written consent to the transaction. Additionally, for any transaction, other than exempt transactions, involving a penny stock, the rules require the delivery, prior to the transaction, of a risk disclosure document mandated by the Commission relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Consequently, the `penny stock` rules may restrict the ability of broker-dealers to sell our common stock and may affect the ability of investors to sell their common stock in the secondary market.

Our common stock is illiquid and may in the future be subject to price volatility unrelated to our operations

Our common stock has no market price and, if and when a market price is established, could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of other companies in the same industry, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock. Sales of substantial amounts of common stock, or the perception that such sales could occur, could adversely affect the market price of our common stock (if and when a market price is established) and could impair our ability to raise capital through the sale of our equity securities.

 
 
 
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We have not voluntarily implemented various corporate governance measures, in the absence of which, shareholders may have more limited protections against interested director transactions, conflicts of interest and similar matters.

Recent Federal legislation, including the Sarbanes-Oxley Act of 2002, has resulted in the adoption of various corporate governance measures designed to promote the integrity of the corporate management and the securities markets. Some of these measures have been adopted in response to legal requirements. Others have been adopted by companies in response to the requirements of national securities exchanges, such as the NYSE or the Nasdaq Stock Market, on which their securities are listed. Among the corporate governance measures that are required under the rules of national securities exchanges are those that address board of directors' independence, audit committee oversight, and the adoption of a code of ethics. We have not yet adopted any of these corporate governance measures and, since our securities are not yet listed on a national securities exchange, we are not required to do so. It is possible that if we were to adopt some or all of these corporate governance measures, stockholders would benefit from somewhat greater assurances that internal corporate decisions were being made by disinterested directors and that policies had been implemented to define responsible conduct. Prospective investors should bear in mind our current lack of corporate governance measures in formulating their investment decisions.

RISKS RELATED TO OUR INDUSTRY

If physicians and hospitals do not accept our products and services, or delay in deciding whether to purchase our products and services, our business, financial condition and results of operations will be adversely affected.

Our business model depends on our ability to sell our products and services. Acceptance of our products and services requires physicians and hospitals to adopt different behavior patterns and new methods of conducting business and exchanging information. Physicians and hospitals may not integrate our products and services into their workflow and other participants in the healthcare market may not accept our products and services as a replacement for traditional methods of conducting healthcare transactions. Achieving market acceptance for our products and services will require substantial sales and marketing efforts and the expenditure of significant financial and other resources to create awareness and demand by participants in the healthcare industry. If we fail to achieve broad acceptance of our products and services by physicians, hospitals and other healthcare industry participants or if we fail to position our services as a preferred method for information management and healthcare delivery, our business, financial condition and results of operations will be adversely affected.

We may not see the benefits of government programs initiated to accelerate the adoption and utilization of health information technology and to counter the effects of the current economic situation.

While government programs have been initiated to improve the efficiency and quality of the healthcare sector and also counter the effects of the current economic situation, including expenditures to stimulate business and accelerate the adoption and utilization of health care technology, we may not receive any of those funds. For example, the passage of the Health Information Technology for Economic and Clinical Health Act, or HITECH, under the American Recovery and Reinvestment Act of 2009 (ARRA) authorizes what is expected to be up to almost $30 billion in expenditures, including discretionary funding, to further adoption of electronic health records. Although we believe that our service offerings will meet the requirements of the HITECH Act in order for our clients to qualify for financial incentives for implementing and using our services, there can be no certainty that any of the planned financial incentives, if made, will be made in regard to our services. We also cannot predict the speed at which physicians will adopt electronic health record systems in response to such government incentives, whether physicians will select our products and services or whether physicians will implement an electronic health record system at all. Any delay in the purchase and implementation of electronic health records systems by physicians in response to government programs, or the failure of physicians to purchase an electronic health record system, could have an adverse effect on our business, financial condition and results of operations. It is also possible that Congress will repeal or not fund HITECH or otherwise amend it in a manner that would be unfavorable to our business.

Our failure to compete successfully could cause our revenue or market share to decline.

The market for our products and services is intensely competitive and is characterized by rapidly evolving technology and product standards, technology and user needs and the frequent introduction of new products and services. Some of our competitors may be more established, benefit from greater name recognition and have substantially greater financial, technical and marketing resources than us. Moreover, we expect that competition will continue to increase as a result of potential incentives provided by the Stimulus and consolidation in both the information technology and healthcare industries. If one or more of our competitors or potential competitors were to merge or partner with another of our competitors, the change in the competitive landscape could adversely affect our ability to compete effectively. We compete on the basis of several factors, including:

 
 
 
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·  
Breadth and depth of services;

·  
Reputation;

·  
Reliability, accuracy and security;

·  
Client service;

·  
Price; and

·  
Industry expertise and experience.
 
Our principal existing competitors in the physician healthcare information systems and services market include Aprima Medical Software (formerly iMedica Corporation), athenahealth Inc., Cerner Corporation, eClinicalWorks Inc., Emdeon Business Services LLC, Epic Systems Corporation, General Electric Company, McKesson Corporation, Quality Systems, Inc., Sage Software, Inc., The Trizetto Group, Inc., and Wellsoft Corporation.

Our principal existing competitors in the hospital and post-acute healthcare information systems and services market include Cernrner Corporation, eDischarge, Epic Systems Corporation, General Electric Company, Maxsys Ltd., McKesson Corporation, MedHost, Meditech, Midas+, Picis, ProviderLink, Quadramed, Siemens AG and WellSoft. We may not be able to compete successfully against current and future competitors or with the competitive pressures that we face and this could materially adversely affect our business, financial condition and results of operations.

It is difficult to predict the sales cycle and implementation schedule for our software solutions.

The duration of the sales cycle and implementation schedule for our software solutions depends on a number of factors, including the nature and size of the potential customer and the extent of the commitment being made by the potential customer, which is difficult to predict. Our sales and marketing efforts with respect to hospitals and large health organizations generally involve a lengthy sales cycle due to these organizations' complex decision-making processes. Additionally, in light of increased government involvement in healthcare, and related changes in the operating environment for healthcare organizations, our potential customers may react by curtailing or deferring investments, including those for our services. If potential customers take longer than we expect to decide whether to purchase our solutions, our selling expenses could increase and our revenues could decrease, which could harm our business, financial condition and results of operations. If customers take longer than we expect to implement our solutions, our recognition of related revenue would be delayed, which would adversely affect our business, financial condition and results of operations.

Our future success depends upon our ability to grow, and if we are unable to manage our growth effectively, we may incur unexpected expenses and be unable to meet our customers' requirements.
 
We will need to expand our operations if we successfully achieve market acceptance for our products and services. We may not be able to expend our systems, procedures, controls and existing space will be adequate to support expansion of our operations. Our future operating results will depend on the ability of our officers and key employees to manage changing business conditions and to implement and improve our technical, administrative, financial control and reporting systems. We may not be able to expand and upgrade our systems and infrastructure to accommodate these increases. Difficulties in managing any future growth could have a significant negative impact on our business, financial condition and results of operations because we may incur unexpected expenses and be unable to meet our customers' requirements.

 
 
 
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Competition for our employees could be intense, and we may not be able to attract and retain the highly skilled employees we need to support our business.

Our ability to provide high-quality services to our clients depends in large part upon our employees' experience and expertise. We must attract and retain highly qualified personnel with a deep understanding of the healthcare and health information technology industries. We compete with a number of companies for experienced personnel and many of these companies, including clients and competitors, have greater resources than we have and may be able to offer more attractive terms of employment. In addition, we intend to invest significant time and expense in training our employees, which increases their value to clients and competitors who may seek to recruit them and increases the costs of replacing them. If we fail to retain our employees, the quality of our services could diminish, which could have a material adverse effect on our business, financial condition and results of operations.

If we are unable to successfully introduce new products or services or fail to keep pace with advances in technology, our business, financial condition and results of operations will be adversely affected.

The successful implementation of our business model depends on our ability to adapt to evolving technologies and increasingly aggressive industry standards and introduce new products and services accordingly. We may not be able to introduce new products on schedule, or at all, or that such products will achieve market acceptance. Moreover, competitors may develop competitive products that could adversely affect our results of operations. A failure by us to introduce planned products or other new products or to introduce these products on schedule could have an adverse effect on our business, financial condition and results of operations.

If we cannot adapt to changing technologies, our products and services may become obsolete, and our business could suffer. Because the health information technology market is characterized by rapid technological change, we may be unable to anticipate changes in our current and potential customers' requirements that could make our existing technology obsolete. Our success will depend, in part, on our ability to continue to enhance our existing products and services, develop new technology that addresses the increasingly sophisticated and varied needs of our prospective customers, license leading technologies and respond to technological advances and emerging industry standards and practices on a timely and cost-effective basis. The development of our proprietary technology entails significant technical and business risks. We may not be successful in using new technologies effectively or adapting our proprietary technology to evolving customer requirements or emerging industry standards, and, as a result, our business could suffer.

Our business depends in part on and will continue to depend in part on our ability to establish and maintain additional strategic relationships.

To be successful, we must establish strategic relationships with leaders in a number of healthcare and health information technology industry segments. This is critical to our success because we believe that these relationships contribute towards our ability to:

 
 
Extend the reach of our products and services to a larger number of physicians and hospitals and to other participants in the Healthcare industry;

 
 
Develop and deploy new products and services;

 
 
Further enhance the Accelera Innovations brand; and

 
 
Generate additional revenue and cash flows.
 
Entering into strategic relationships is complicated because strategic partners may decide to compete with us in some or all of our markets. In addition, we may not be able to maintain or establish relationships with key participants in the healthcare industry if we conduct business with their competitors. We will depend, in part, on our strategic partners' ability to generate increased acceptance and use of our products and services. If we fail to establish additional relationships, or if our strategic relationships fail to benefit us as expected, we may not be able to execute our business plan, and our business, financial condition and results of operations may suffer.

 
 
 
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Future acquisitions may result in potentially dilutive issuances of equity securities, the incurrence of indebtedness and increased amortization expense.

Future acquisitions may result in dilutive issuances of equity securities, the incurrence of debt, the assumption of known and unknown liabilities, the write off of software development costs and the amortization of expenses related to intangible assets, all of which could have an adverse effect on our business, financial condition and results of operations.

If our products fail to perform properly due to errors or similar problems, our business could suffer.

Complex software, such as ours, often contains defects or errors, some of which may remain undetected for a period of time. It is possible that such errors may be found after the introduction of new software or enhancements to existing software. We continually introduce new solutions and enhancements to our solutions, and, despite testing by us, it is possible that errors may occur in our software. If we detect any errors before we introduce a solution, we might have to delay deployment for an extended period of time while we address the problem. If we do not discover software errors that affect our new or current solutions or enhancements until after they are deployed, we would need to provide enhancements to correct such errors. Errors in our software could result in:

·  
Harm to our reputation;

·  
Lost sales;

·  
Delays in commercial releases;

·  
Product liability claims;

·  
Delays in or loss of market acceptance of our solutions;

·  
License terminations or renegotiations; and

·  
Unexpected expenses and diversion of resources to remedy errors.
 
Furthermore, our customers might use our software together with products from other companies or those that they have developed internally. As a result, when problems occur, it might be difficult to identify the source of the problem. Even when our software does not cause these problems, the existence of these errors might cause us to incur significant costs, divert the attention of our technical personnel from our solution development efforts, impact our reputation and cause significant customer relations problems.

Our business depends on our intellectual property rights, and if we are unable to protect them, our competitive position may suffer.

Our business plan is predicated on our proprietary systems and technology products. Accordingly, protecting our intellectual property rights is critical to our continued success and our ability to maintain our competitive position. In addition to existing trademark, trade secret and copyright law, we protect our proprietary rights through confidentiality agreements and technical measures. We generally do not have any patents on our technology. We generally enter into non-disclosure agreements with our employees and consultants and limit access to our trade secrets and technology. Nonetheless, in some instances, third parties may have access to source-code versions of software. Furthermore, our use and distribution of open source software and modules in connection with our business also presents risks. Open source commonly refers to software whose source code is subject to a license allowing it to be modified, combined with other software and redistributed, subject to restrictions set forth in the license. We cannot be certain that, under the terms of those licenses, our software will not become publicly available or that we will be found to be in material compliance with such agreements. The steps we have taken may not have and may not continue to prevent misappropriation of our technology and misappropriations of our intellectual property have occurred in the past. Misappropriation of our intellectual property could have an adverse effect on our competitive position. In addition, we may have to engage in litigation in the future to enforce or protect our intellectual property rights or to defend against claims of infringement, misappropriation or other violations of third-party intellectual property rights. We may incur substantial costs and the diversion of management's time and attention as a result and an adverse decision could have a negative impact on our business.
 
 
 
 
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If we are deemed to infringe, misappropriate or violate the proprietary rights of third parties, we could incur unanticipated expense and be prevented from providing our products and services.

We are and may continue to be subject to intellectual property infringement, misappropriation or other intellectual property violation claims as our applications' functionality overlaps with competitive products and third parties may claim that we do not own or have rights to use all intellectual property rights used in the conduct of our business. Claims may be occasionally asserted against us, and may have infringements, misappropriation or claims alleging intellectual property violations asserted against us in the future. We could incur substantial costs and diversion of management resources defending any such claims. Furthermore, a party making a claim against us could secure a judgment awarding substantial damages, as well as injunctive or other equitable relief that could effectively block our ability to provide products or services. In addition, our licenses for any intellectual property of third parties that might be required for our products or services may not be available on commercially reasonable terms, or at all. Such claims also might require indemnification of our clients at significant expense.

If our content and service providers fail to perform adequately, or to comply with laws, regulations or contractual covenants, our reputation and our business, financial condition and results of operations could be adversely affected.

We will depend on independent content and service providers for communications and information services and for many of the benefits we provide through our software applications and services, including the maintenance of managed care pharmacy guidelines, drug interaction reviews, the routing of transaction data to third-party payers and the hosting of our applications. Our ability to rely on these services could be impaired as a result of the failure of such providers to comply with applicable laws, regulations and contractual covenants, or as a result of events affecting such providers, such as power loss, telecommunication failures, software or hardware errors, computer viruses and similar disruptive problems, fire, flood and natural disasters. Any such failure or event could adversely affect our relationships with our customers and damage our reputation. This would adversely affect our business, financial condition and results of operations. In addition, we may have no means of replacing content or services on a timely basis or at all if they are inadequate or in the event of a service interruption or failure. We also rely on independent content providers for the majority of the clinical, educational and other healthcare information that we provide. In addition, we depend on our content providers to deliver high quality content from reliable sources and to continually upgrade their content in response to demand and evolving healthcare industry trends. If these parties fail to develop and maintain high quality, attractive content, the value of our brand and our business, financial condition and results of operations could be impaired.

We may be liable for use of content we provide.

We will provide content for use by healthcare providers in treating patients. Third-party contractors provide us with most of this content. If this content is incorrect or incomplete, adverse consequences, including death, may occur and give rise to product liability and other claims against us. In addition, certain of our solutions provide applications that relate to patient clinical information, and a court or government agency may take the position that our delivery of health information directly, including through licensed practitioners, or delivery of information by a third party site that a consumer accesses through our websites, exposes us to personal injury liability, or other liability for wrongful delivery or handling of healthcare services or erroneous health information. While we intend to have product liability insurance coverage in an amount that we believe is sufficient for our business, we cannot assure you that this coverage will prove to be adequate or will continue to be available on acceptable terms, if at all. A claim brought against us that is uninsured or under-insured could harm our business, financial condition and results of operations. Even unsuccessful claims could result in substantial costs and diversion of management resources.

If our security is breached, we could be subject to liability, and customers could be deterred from using our services.

Our business relies on electronic transmission of confidential patient and other information. We believe that any well-publicized compromise of our network security or a misappropriation of patient information or other data would adversely affect our reputation and would require us to devote significant financial and other resources to alleviate such problems. In addition, our existing or potential customers could be deterred from using our products and services, and we could be subject to liability and regulatory action. We could face financial loss, litigation and other liabilities to the extent that our activities or the activities of third-party contractors involve the storage and transmission of confidential information, such as patient records or credit information.

 
 
 
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If we are forced to reduce our prices, our business, financial condition and results of operations could suffer.

We may be subject to pricing pressures with respect to our future sales arising from various sources, including practices of managed care organizations, group purchasing arrangements made through government programs such as the Regional Extension Centers, and government action affecting reimbursement levels affecting physicians, hospitals, home health professionals or any combination thereof under Medicare, Medicaid and other government health programs. Our potential customers and the other entities with which we may have a business relationship are affected by changes in statutes, regulations and limitations in governmental spending for Medicare, Medicaid and other programs. Recent government actions and future legislative and administrative changes could limit government spending for the Medicare and Medicaid programs, limit payments to hospitals and other providers, increase emphasis on competition, impose price controls, initiate new and expanded value-based reimbursement programs and create other programs that potentially could have an adverse effect on our customers and the other entities with which we have a business relationship. If our pricing experiences significant downward pressure, our business will be less profitable and our results of operations would be adversely affected. In addition, because cash from sales will fund some of our working capital requirements, reduced profitability could require us to raise additional capital sooner than we would otherwise need.
 
The Health Information Technology for Economic and Clinical Health Act (HITECH) is resulting in new business imperatives, and failure to provide our clients with health information technology systems that are "certified" under HITECH could result in breach of some client obligations and put us at a competitive disadvantage.

HITECH, which is part of the American Recovery and Reinvestment Act of 2009 (ARRA), provides financial incentives for hospitals and doctors that demonstrate that they are "meaningful electronic health record users," and mandates use of health information technology systems that are "certified" according to technical standards developed under the supervision of the Secretary of the Department of Health and Human Services. HITECH also imposes certain requirements upon governmental agencies to use, and requires health care providers, health plans, and insurers contracting with such agencies to use, systems that are certified according to such standards. HITECH can adversely affect our business in at least three ways. First, if the Company invests and continue to invest in conforming our applicable clinical software to these standards and further significant investment will be required as certification standards evolve (the full Stage 2 requirements, for instance, are still in their early stages). Second,  new client prospects  may require us to agree that our software will be certified according to applicable HITECH technical standards so that, assuming clients properly use the electronic health record software and satisfy the "meaningful use" and other requirements of HITECH, they will qualify for available incentive payments. We plan to meet these requirements as part of our normal software maintenance obligations, and failure to comply could result in costly contract breach and jeopardize our relationships with clients who are relying upon us to provide certified software. Third, if for some reason we are not able to comply with these HITECH standards in a timely fashion after their issuance, our offerings will be at a severe competitive disadvantage in the market to the offerings of other electronic health record vendors who have complied.

Changes in interoperability standards applicable to our software could require us to incur substantial additional development costs.

Our potential clients and the industry leaders enacting regulatory requirements are concerned with and often require that our software solutions and healthcare devices be interoperable with other third party health IT suppliers. Market forces or governmental/regulatory authorities could create software interoperability standards that would apply to our solutions, and if our software solutions and/or healthcare devices are not consistent with those standards, we could be forced to incur substantial additional development costs. The Certification Commission for Health Information Technology (CCHIT) has developed a comprehensive set of criteria for the functionality, interoperability and security of various software modules in the health IT industry. CCHIT, however, continues to modify and refine those standards. Achieving CCHIT certification is becoming a competitive requirement, resulting in increased software development and administrative expense to conform to these requirements. These standards and specifications, once finalized, will be subject to interpretation by the entities designated to certify such technology. We will incur increased development costs in delivering solutions if we need to upgrade our software and healthcare devices to be in compliance with these varying and evolving standards, and delays may result in connection therewith. If our software solutions and healthcare devices are not consistent with these evolving standards, our market position and sales could be impaired and we may have to invest significantly in changes to our software solutions and healthcare devices, although we do not expect such costs to be significant in relation to the overall development costs for our solutions.

 
 
 
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We are subject to a number of existing laws, regulations and industry initiatives, non-compliance with certain of which could materially adversely affect our operations or otherwise adversely affect our business, financial condition and results of operations, and we are susceptible to a changing regulatory environment.

As a participant in the healthcare industry, our operations and relationships, and those of our customers, are regulated by a number of federal, state and local governmental entities. The impact of this regulation on us is direct, to the extent we are ourselves subject to these laws and regulations, and is also indirect in that, in a number of situations, even though we may not be directly regulated by specific healthcare laws and regulations, our products must be capable of being used by our customers in a manner that complies with those laws and regulations. Inability of our customers to do so could affect the marketability of our products or our compliance with our customer contracts, or even expose us to direct liability under the theory that we had assisted our customers in a violation of healthcare laws or regulations. Because our business relationships with physicians will be unique and the healthcare technology industry as a whole is relatively young, the application of many state and federal regulations to our business operations and to our customers is uncertain. Indeed, there are federal and state fraud and abuse laws, including anti-kickback laws and limitations on physician referrals, and laws related to distribution and marketing, including off-label promotion of prescription drugs that may be directly or indirectly applicable to our operations and relationships or the business practices of our customers. It is possible that a review of our business practices or those of our customers by courts or regulatory authorities could result in a determination that could adversely affect us. In addition, the healthcare regulatory environment may change in a way that restricts our existing operations or our growth. The healthcare industry is expected to continue to undergo significant changes for the foreseeable future, which could have an adverse effect on our business, financial condition and results of operations. We cannot predict the effect of possible future legislation and regulation.

Specific risks include, but are not limited to, risks relating to:
 
Patient Information. As part of the operation of our business, our customers may provide to us patient-identifiable medical information related to the prescription drugs that they prescribe and other aspects of patient treatment. Government and industry legislation and rulemaking, especially HIPAA, HITECH and standards and requirements published by industry groups such as the Joint Commission on Accreditation of Healthcare Organizations, require the use of standard transactions, standard identifiers, security and other standards and requirements for the transmission of certain electronic health information.

National standards and procedures under HIPAA include the "Standards for Electronic Transactions and Code Sets" (the Transaction Standards); the "Security Standards" (the Security Standards); and the "Standards for Privacy of Individually Identifiable Health Information" (the Privacy Standards). The Transaction Standards require the use of specified data coding, formatting and content in all specified "Health Care Transactions" conducted electronically. The Security Standards require the adoption of specified types of security for certain patient identifiable health information (called Protected Health Information). The Privacy Standards grant a number of rights to individuals as to their Protected Health Information and restrict the use and disclosure of Protected Health Information by Covered Entities, defined as "health plans," "health care providers, "and "health care clearinghouses." We have reviewed our potential activities and believe that we are a Covered Entity to the extent that we will maintain a "group health plan" for the benefit of our employees. We have taken steps we believe to be appropriate and required to bring our group health plan into compliance with HIPAA and HITECH. For our operating functions, we believe that we are a hybrid entity, with both covered and non-covered functions under HIPAA. The Payerpath portion of our business qualifies as a health care clearinghouse when it files electronic health care claims on behalf of health care providers that are subject to HIPAA and HITECH and we have instituted policies and procedures to comply with HIPAA and HITECH in that role. With respect to our other business functions, we do not believe we are a Covered Entity as a health care provider or as a health care clearinghouse; however, the definition of a health care clearinghouse is broad and we cannot offer any assurance that we could not be considered a health care clearinghouse under HIPAA or that, if we are determined to be a healthcare clearinghouse, the consequences would not be adverse to our business, financial condition and results of operations. In addition, certain provisions of the Privacy and Security Standards apply to third parties that create, access, or receive Protected Health Information in order to perform a function or activity on behalf of a Covered Entity. Such third parties are called "Business Associates." Covered Entities must have a written "Business Associate Agreement" with such third parties, containing specified written satisfactory assurances, consistent with the Privacy and Security Standards and HITECH and its implementing regulations, that the third party will safeguard Protected Health Information that it creates or accesses and will fulfill other material obligations. Most of our potential customers are Covered Entities, and we will function in many of our relationships as a Business Associate of those customers. We would face liability under our Business Associate Agreements and HIPAA and HITECH if we do not comply with our Business Associate obligations and applicable provisions of the Privacy and Security Standards and HITECH and its implementing regulations. The penalties for a violation of HIPAA or HITECH are significant and could have an adverse impact upon our business, financial condition and results of operations, if such penalties ever were imposed. Additionally, Covered Entities that are providers are required to adopt a unique standard National Provider Identifier, or NPI, for use in filing and processing health care claims and other transactions. Subject to the discussion set forth above, we believe that the principal effects of HIPAA are, first, to require that our systems be capable of being operated by us and our potential customers in a manner that is compliant with the various HIPAA standards and, second, to require us to enter into and comply with Business Associate Agreements with our Covered Entity customers.

 
 
 
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For most Covered Entities, the deadlines for compliance with the Privacy Standards and the Transaction Standards occurred in 2003. Covered Entities, with the exception of small health plans (as that term is defined by the Privacy Standards), were required to be in compliance with the Security Standards by April 20, 2005 and to use NPIs in standard transactions no later than the compliance dates, which was May 23, 2007, for all but small health plans, and May 23, 2008 for small health plans. We have policies and procedures that we believe comply with federal and state confidentiality requirements for the handling of Protected Health Information that we receive and with our obligations under Business Associate Agreements. In particular, we believe that our systems and products are capable of being used by or for our potential customers in compliance with the Transaction Standards and Security Standards and are capable of being used by or for our potential customers in compliance with the NPI requirements. If, however, we do not follow those procedures and policies, or they are not sufficient to prevent the unauthorized disclosure of Protected Health Information, we could be subject to civil and/or criminal liability, fines and lawsuits, termination of our potential customer contracts or our operations could be shut down. Moreover, because all HIPAA Standards and HITECH implementing regulations and guidance are subject to change or interpretation, we cannot predict the full future impact of HIPAA or HITECH on our business and operations. In the event that the HIPAA or HITECH standards and compliance requirements change or are interpreted in a way that requires any material change to the way in which we do business, our business, financial condition and results of operations could be adversely affected. Additionally, certain state laws are not preempted by HIPAA and HITECH and may impose independent obligations upon our customers or us. Additional legislation governing the acquisition, storage and transmission or other dissemination of health record information and other personal information, including social security numbers, has been proposed at the state level. There may be changes to state or federal laws that could materially restrict the ability of providers to submit information from patient records using our products and services.
 
Electronic Prescribing. The use of our software by physicians to perform a variety of functions, including electronic prescribing (ePrescribing), which refers to the electronic routing of prescriptions to pharmacies and the ensuing dispensation, is governed by state and federal law, including fraud and abuse laws. States have differing prescription format requirements, which we have programmed into our software. Many existing laws and regulations, when enacted, did not anticipate methods of e-commerce now being developed. While federal law and the laws of many states permit the electronic transmission of certain prescription orders, the laws of several states neither specifically permit nor specifically prohibit the practice. Restrictions exist at the Federal level, however, on the use of ePrescribing for controlled substances and certain other drugs, including a new regulation enacted by the Drug Enforcement Association (DEA) in mid-2010. Given the rapid growth of electronic transactions in healthcare, and particularly the growth of the Internet, we expect many additional states to directly address these areas with regulation in the near future. In addition, on November 7, 2005, the Department of Health and Human Services published its final "E-Prescribing and the Prescription Drug Program" regulations (E-Prescribing Regulations). These regulations are required by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) and became effective beginning on January 1, 2006. The E-Prescribing Regulations consist of detailed standards and requirements, in addition to the HIPAA Standard discussed above, for prescription and other information transmitted electronically in connection with a drug benefit covered by the MMA's Prescription Drug Benefit. These standards cover not only transactions between prescribers and dispensers for prescriptions but also electronic eligibility and benefits inquiries and drug formulary and benefit coverage information. The standards apply to prescription drug plans participating in the MMA's Prescription Drug Benefit. Other rules governing ePrescribing apply to other areas of Medicare and to Medicaid. The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) authorized a new and separate incentive program for individual eligible professionals who are successful electronic prescribers as defined by MIPPA. This incentive program is separate from and is in addition to the quality reporting incentive program authorized by Division B of the Tax Relief and Health Care Act of 2006—Medicare Improvements and Extension Act of 2006 and which is known as the Physician Quality Reporting Initiative (PQRI). Eligible professionals do not need to participate in PQRI to participate in the ePrescribing Incentive Program, and both programs remain in effect in 2011 assuming compliance with certain requirements. To the extent that these new initiatives and regulations foster the accelerated adoption of ePrescribing and the Company is in the ePrescribing space, our business benefits from these incentive programs. But, HITECH is the most prominent incentive program since its passage, reducing the impact the MIPPA and PQRA programs have in spurring greater adoption of ePrescribing or other health information technology. Moreover, regulations in this area impose certain requirements which can be burdensome and evolve regularly, meaning that any potential benefits may be reversed by a newly-promulgated regulation that adversely affects our business model. Aspects of our clinical products could be affected by such regulation because of the need of our potential customers to comply, as discussed above. Compliance with these regulations could be burdensome, time-consuming and expensive. We also are subject, as discussed above, to future legislation and regulations concerning the development and marketing of healthcare software systems or requirements related to product functionality. These could increase the cost and time necessary to market new services and could affect us in other respects not presently foreseeable.

 
 
 
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Electronic Health Records. A number of important federal and state laws govern the use and content of electronic health record systems, including fraud and abuse laws that may affect the donation of such technology. As a company that provides electronic health record systems to a variety of providers of healthcare, our systems and services must be designed in a manner that facilitates our potential customers' compliance with these laws. Because this is a topic of increasing state and federal regulation, we continue to monitor legislative and regulatory developments that might affect our business practices as they relate to electronic health record systems, revenue cycle management systems, ePrescribing and others. We cannot predict the content or effect of possible future regulation on our business practices.

Claims Transmission. Our system could electronically transmits claims for prescription medications dispensed by physicians to patients' payers for immediate approval and reimbursement. Federal law provides that it is both a civil and a criminal violation for any person to submit, or cause to be submitted, a claim to any payer, including, without limitation, Medicare, Medicaid and all private health plans and managed care plans, seeking payment for any services or products that overbills or bills for items that have not been provided to the patient. We intend to have in place policies and procedures that we believe assure that all claims that are transmitted by our system are accurate and complete, provided that the information given to us by our potential customers is also accurate and complete. If, however, we do not follow those procedures and policies, or they are not sufficient to prevent inaccurate claims from being submitted, we could be subject to liability. As discussed above, the HIPAA Transaction Standards and the HIPAA Security Standards also affect our claims transmission services, since those services must be structured and provided in a way that supports our customers' HIPAA compliance obligations. Furthermore, to the extent that there is some type of security breach, it could have a material adverse effect on our business.

Medical Devices. Certain computer software products are regulated as medical devices under the Federal Food, Drug, and Cosmetic Act. On February 15, 2011, the U.S. Food and Drug Administration (FDA) issued a final rule classifying Medical Device Data Systems from Class III to Class I medical devices under the Federal Food, Drug, and Cosmetic Act. We will evaluate what effect, if any, the rule has on our products. To the extent that any of our products meet the definition of a Medical Device Data System, we, as a manufacturer of such products, would be required to register and list our products with the FDA. In addition, Medical Device Data System products would be subject to the Federal Food, Drug, and Cosmetic Act's general controls, including those relating to good manufacturing practices and adverse event reporting. The FDA can impose extensive requirements governing product design controls and quality assurance processes. Failure to comply with FDA requirements can result in criminal and civil fines and penalties, product seizure, injunction, and civil monetary policies—each of which could have an adverse effect on our business. The FDA may become increasingly active in regulating computer software intended for use in healthcare settings. Depending on the product, we could be required to notify the FDA and demonstrate substantial equivalence to other products on the market before marketing such products or obtain FDA approval by demonstrating safety and effectiveness before marketing a product. Depending on the intended use of a device, the FDA could require us to obtain extensive data from clinical studies to demonstrate safety or effectiveness or substantial equivalence. If the FDA requires these data, we could be required to obtain approval of an investigational device exemption before undertaking clinical trials. Clinical trials can take extended periods of time to complete. We cannot provide assurances that the FDA will approve or clear a device after the completion of such trials. In addition, these products would be subject to the Federal Food, Drug and Cosmetic Act's general controls. The FDA can impose extensive requirements governing pre- and post-market conditions like approval, labeling and manufacturing.

Additionally, recently enacted public laws reforming the U.S. healthcare system may have an impact on our business. The Patient Protection and Affordable Care Act (H.R. 3590; Public Law 111-148) ("PPACA") and The Health Care and Education Reconciliation Act of 2010 (H.R. 4872) (the "Reconciliation Act"), which amends the PPACA (collectively the "Health Reform Laws"), were signed into law in March 2010. The Health Reform Laws contain various provisions which may impact us and our potential customers. Some of these provisions may have a positive impact by implementing reimbursement programs that reward providers for patient-centered, health IT-dependent activities (e.g., Accountable Care Organizations), for example, while others, such as reductions in reimbursement for certain types of providers, may have a negative impact due to fewer available resources. Increases in fraud and abuse penalties may also adversely affect participants in the health care sector, including us.

 
 
 
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Increased government involvement in healthcare could adversely affect our business.
 
U.S. healthcare system reform at both the federal and state level, could increase government involvement in healthcare, lower reimbursement rates and otherwise change the business environment of our potential customers and the other entities with which we have a business relationship. We cannot predict whether or when future healthcare reform initiatives at the federal or state level or other initiatives affecting our business will be proposed, enacted or implemented or what impact those initiatives may have on our business, financial condition or results of operations. Our potential customers and the other entities with which we have a business relationship could react to these initiatives and the uncertainty surrounding these proposals by curtailing or deferring investments, including those for our products and services. Additionally, the government has signaled increased enforcement activity targeting healthcare fraud and abuse, which could adversely impact our business, either directly or indirectly. To the extent that our potential customers, most of whom are providers, may be affected by this increased enforcement environment, our business could correspondingly be affected. Additionally, government regulation could alter the clinical workflow of physicians, hospitals and other healthcare participants, thereby limiting the utility of our products and services to  potential customers and curtailing broad acceptance of our products and services. Further examples of government involvement could include requiring the standardization of technology relating to electronic health records, providing potential customers with incentives to adopt electronic health record solutions or developing a low-cost government sponsored electronic health record solution, such as the VistA-Office electronic health record. Additionally, certain safe harbors to the federal Anti-Kickback Statute and corresponding exceptions to the federal Stark law may alter the competitive landscape. These safe harbors and exceptions are intended to accelerate the adoption of electronic prescription systems and electronic health records systems, and therefore provide new and attractive opportunities for us to work with hospitals and other donors who wish to provide our solutions to physicians. At the same time, such safe harbors and exceptions may result in increased competition from providers of acute electronic health record solutions, whose hospital customers may seek to donate their existing acute electronic health record solutions to physicians for use in ambulatory settings.

If the electronic healthcare information market fails to develop as quickly as expected, our business, financial condition and results of operations will be adversely affected.

The electronic healthcare information market is in the early stages of development and is rapidly evolving. A number of market entrants have introduced or developed products and services that are competitive with one or more components of the solutions we offer. We expect that additional companies will continue to enter this market, especially in response to recent government subsidies. In new and rapidly evolving industries, there is significant uncertainty and risk as to the demand for, and market acceptance of, recently introduced products and services. Because the markets for our products and services are new and evolving, we are not able to predict the size and growth rate of the markets with any certainty. There may not be a market for our products and services that will develop and, if they do, they will be strong and continue to grow at a sufficient pace. If markets fail to develop, develop more slowly than expected or become saturated with competitors, our business, financial condition and results of operations will be adversely affected.

Consolidation in the healthcare industry could adversely affect our business, financial condition and results of operations.

Many healthcare industry participants are consolidating to create integrated healthcare delivery systems with greater market power. As provider networks and managed care organizations consolidate, thus decreasing the number of market participants, competition to provide products and services like ours will become more intense, and the importance of establishing relationships with key industry participants will become greater. These industry participants may try to use their market power to negotiate price reductions for our products and services. Further, consolidation of management and billing services through integrated delivery systems may decrease demand for our products. If we were forced to reduce our prices, our business would become less profitable unless we were able to achieve corresponding reductions in our expenses.

 
 
 
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Our business strategy includes expansion into markets outside North America, which will require increased expenditures and if our international operations are not successfully implemented, such expansion may cause our operating results and reputation to suffer.

We intend on working to expand operations in markets outside North America.  These efforts may not be successful. We have limited experience in marketing, selling, implementing and supporting our software abroad. Expansion of our international sales and operations will require a significant amount of attention from our management, establishment of service delivery and support capabilities to handle that business and commensurate financial resources, and will subject us to risks and challenges that we would not face if we conducted our business only in the United States. We may not generate sufficient revenues from international business to cover these expenses. The risks and challenges associated with operations outside the United States may include: the need to modify our software to satisfy local requirements and standards, including associated expenses and time delays; laws and business practices favoring local competitors; compliance with multiple, conflicting and changing governmental laws and regulations, including healthcare, employment, tax, privacy, healthcare information technology, and data and intellectual property protection laws and regulations; laws regulating exports of technology products from the United States; fluctuations in foreign currency exchange rates; difficulties in setting up foreign operations, including recruiting staff and management; and longer accounts receivable payment cycles and other collection difficulties. One or more of these requirements and risks may preclude us from operating in some markets.

Foreign operations subject us to numerous stringent U.S. and foreign laws, including the Foreign Corrupt Practices Act, or FCPA, and comparable foreign laws and regulations that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. and other business entities for the purpose of obtaining or retaining business. As we expand our international operations, there is some risk of unauthorized payments or offers of payments by one of our employees, consultants, sales agents or distributors, which could constitute a violation by Eclipsys of various laws including the FCPA, even though such parties are not always subject to our control. Safeguards we implement to discourage these practices may prove to be less than effective and violations of the FCPA and other laws may result in severe criminal or civil sanctions, or other liabilities or proceedings against us, including class action law suits and enforcement actions from the SEC, Department of Justice and overseas regulators.

Foreign operations present certain additional risks, including:

 
 
The general economic and political conditions existing in those countries;

 
 
Difficulties in staffing and managing our foreign offices, and the increased travel, infrastructure and legal and compliance costs associated with multiple international locations;

 
 
Devaluations and fluctuations in currency exchange rates;

 
 
Imposition of limitations on conversion of foreign currencies or remittance of dividends and other payments by foreign subsidiaries;

 
 
Imposition or increase of withholding and other taxes on remittances and other payments by subsidiaries;

 
 
Imposition or increase of investment and other restrictions by foreign governments;

 
 
Longer payment cycles; and

 
 
Greater difficulties in accounts receivable collection.
 
 
 
 
 
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ITEM 1B.  UNRESOLVED STAFF COMMENTS
 
Not applicable.

 
ITEM 2.  PROPERTIES
 
At this time, the Company maintains its designated office at 20511 Abbey Drive, Frankfort, Illinois 60423. The Company’s telephone number is 650-283-2653.

 
ITEM 3.  LEGAL PROCEEDINGS
 
While we are not currently a party to any material pending legal proceedings, from time to time we may be named as a party to lawsuits in the normal course of our business.
 
ITEM 4.  (REMOVED AND RESERVED)
 

PART II
 
ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 
There is no established trading market for our common stock or any other class of our equity securities.
 
On November 29, 2012 the Company received notice of effectiveness our public offering of 5,000,000 is being made on a self-underwritten basis: no minimum number of shares must be sold in order for the offering to proceed. The net proceeds to us from the sale of up to 5,000,000 shares offered at a public offering price of $7.00 per share will vary depending upon the total number of shares sold. Regardless of the number of shares sold, we expect to incur offering expenses estimated at $21,234.00 for legal, accounting, printing and other costs in connection with this offering (see “Other Expenses of Issuance and Distribution” in Part II). We will not receive any proceeds from the sale of shares by the selling shareholders. We will not maintain an escrow account for the receipt of proceeds from the sale of our shares.

The Company will not be able to commercialize its technology without additional capital, if we do not raise additional funds of at least $30 million for the deployment of its technology over the next three years it could lose its rights to the technology. The Company will require significant additional financing in order to meet the milestones and requirements of its Business Plan and avoid discontinuation of the License. Funding would be required for staffing, marketing, public relations and the necessary distribution to expanding the scope of its offering to include the global market. The Company intends to seek $35,000,000 in this offering through the sale of equity or convertible debt securities, the issuance of these securities could dilute existing shareholders. The Company’s funding plans include selling additional capital stock and/or borrowing to fund the aforementioned expenses. The Company intends to approach Hedge Funds, Venture Capital Groups, Private Investment Groups and other Institutional Investment Groups in its efforts to achieve future funding. The Company therefore intends to raise $35,000,000 in this offering, the proceeds of which are estimated to be utilized as follows:
 
 
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The following table sets forth the uses of proceeds from the primary offering would be used assuming the sale of 25%, 50%, 75% and 100%, respectively, of the securities offered for sale by the Company. There is no assurance that we will raise the full $35,000,000 as anticipated.
 
Percent of total shares offered
    25%       50%       75%       100%  
                                 
Shares Sold
  $ 1,250,000     $ 2,500,000     $ 3,750,000     $ 5,000,000  
                                 
Gross Proceeds from offering
    8,750,000       17,500,000       26,250,000       35,000,000  
Less offering expenses (1)
    21,234       21,234       21,234       21,234  
Net offering proceeds
    8,728,766       17,478,766       26,228,766       34,978,766  
                                 
Use of Net Proceeds
                               
                                 
Management, Business Development and related expenses:
                               
Management (2)
    800,000       1,155,062       1,875,000       2,500,000  
Business Development (3)
    900,000       1,300,000       4,424,964       7,374,940  
Infustructure and Software expenditures:
                               
Infustructure
    1,500,000       2,300,000       3,108,000       5,180,000  
Software
    2,500,000       5,300,000       9,397,098       12,500,000  
Other expenditures:
                               
                                 
Advertising and Public Relations
    2,000,000       2,000,000       2,000,000       2,000,000  
Working Capital Regulatory Costs (EDGAR, PRINTING etc.)
    15,000       15,000       15,000       15,000  
                                 
                                 
Legal
    25,000       25,000       25,000       25,000  
Accounting
    13,000       13,000       13,000       13,000  
Other – Payroll, Office & Miscellaneous
    975,766       2,360,643       2,360,643       2,360,643  
Reserve for special projects
            1,000       1,000,000       1,000,000  
Sub-total for Working Capital
    8,728,766       15,468,705       24,218,705       32,968,705  
                                 
Unallocated working capita l *
    -       2,010,061       2,010,061       2,010,061  
                                 
Total Use of Proceeds
  $ 8,728,766     $ 17,478,766     $ 26,228,766     $ 34,978,766  
_______________
 
(1)
Such $21,234 of offering expenses consisting of an SEC registration fee of $7,586.30, transfer agent fees of $1,000, legal fees of $9,237.70, accounting fees of $3,000, printing costs of 100 and miscellaneous costs of $310.

(2)
Includes base compensation, benefits and expenses for director-level, and above, domestic and international employees over a two year time frame with the number of management team members (12) ramping up commensurate with the staff build-up. Of the total, 65% is for base compensation, 13% for benefits and taxes, and 22% for expenses.

(3)
Compensation for an estimated domestic and international marketing staff ramping up to 16 full-time-equivalent (FTE) business development (marketing) employees over a two-year time frame. Of the total, 80% is for base compensation (average salary, $60,000); with 20% for benefits and taxes. This also includes the marketing cost.
 
 
 
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We expect to use the proceeds from this offering, in order of priority, for the deployment of our technology into new metropolitan markets with an estimated expenditure of approximately $16 million through December 31, 2013, and approximately $19 million through December 31, 2014 for general corporate purposes, for which proceeds we have an estimated plan. The principal purposes of this offering are to obtain additional capital, to create a public market for our common stock, facilitate future access to public equity markets, increase awareness of our company among potential customers, expand into new metropolitan markets, broaden our scope of care, and improve our competitive position. We believe that the net proceeds from this offering, our existing cash resources and interest on these funds will be sufficient to meet our projected operating requirements.
 
Pending use as described above, we plan to invest the net proceeds in a variety of capital preservation instruments, including short-term, interest bearing obligations, investment grade instruments, certificates of deposit or direct or guaranteed obligations of the United States. The goal with respect to the investment of these net proceeds is capital preservation and liquidity so that such funds are readily available to fund the development and expansion of our business.

DETERMINATION OF THE OFFERING PRICE

The offering price of the 5,000,000 shares being offered has been determined arbitrarily by us. The price does not bear any relationship to our assets, book value, earnings, or other established criteria for valuing a privately held company. In determining the number of shares to be offered and the offering price, we took into consideration our cash on hand and the amount of money we would need to implement our business plan. Accordingly, the offering price should not be considered an indication of the actual value of the securities. We will not receive any of the proceeds from the sale of the 4,456,880 common shares being offered for sale by the selling stockholders, which 4,103,368 shares of our common stock may be offered and sold from time to time by the selling stockholders after the expiration of the 180 day lockup and leak-out agreement described below . The selling shareholders will sell our shares at $7.00 per share until our shares are quoted on the OTCBB or other U.S. trading exchange if ever, and thereafter at prevailing market prices or privately negotiated prices. This price was arbitrarily determined by us.

SELLING STOCKHOLDERS

The common shares being offered for resale by the 89 selling stockholders consist of 4,456,880 shares of our common stock, $0.0001 par value representing (20.91%) of the 21,311,812 issued and outstanding shares of common stock. There are 4,103,368 shares (the “Lock-up Shares”) of the 4,456,880 held by the selling stockholders that are subject to lock-up agreements. These shares are subject to lock-up agreements that are scheduled to expire at various times during the next 33 months. Under the terms of the lock-up agreements, the Lock-up Shares cannot be sold or transferred for a period of six (6) months (the “Lock-up Period”) from November 29,2012 the date that the Securities and Exchange Commission (SEC) declared our registration statement effect (the “Effective Date”). On the date of expiration of the Lock-up Period and for each of the nine (9) consecutive three-month periods after the date of expiration of the Lock-up Period, the aggregate number of Lock-Up Shares that may be sold or transferred in the three-month period after the date of expiration of the Lock-up Period and in any such three-month period shall not exceed (i) that number of Lock-up Shares equal to 10% of the Stockholder’s Lock-up Shares held on the Effective Date (the “10% Limit”), for any Stockholder who is not an affiliate of the Company and (ii) the maximum amount permitted under applicable law or regulation for any Stockholder who is an “affiliate” in any 90-day period, provided that such maximum amount does not exceed the 10% Limit. The release dates, number of shares being released, and corresponding percentages of our 21,311,812 outstanding shares, are 410,336 shares (1.92%) six (6) months after the Lock-up Period and 410,336 shares (1.92%) for each of the nine (9) consecutive three-month periods after the date of expiration of the Lock-up Period.
 
PLAN OF DISTRIBUTION

Plan of Distribution for the Company’s Initial Public Offering of 5,000,000

Accelera Innovations, Inc. has 21,311,812 common shares of common stock issued and outstanding as of the date of this prospect Form -10K. The Company has registered an additional 5,000,000 shares of its common stock for sale at the price of $7.00 per share for the duration of the offering, which is a period of 16 months from November 29, 2012. There is no arrangement to address the possible effect of the offering on the price of the stock.
 
 
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In connection with the Company’s selling efforts in the offering, John Wallin will not register as a broker-dealer pursuant to Section 15 of the Exchange Act, but rather will rely upon the “safe harbor” provisions of SEC Rule 3a4-1, promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Generally speaking, Rule 3a4-1 provides an exemption from the broker-dealer registration requirements of the Exchange Act for persons associated with an issuer that participate in an offering of the issuer’s securities. Mr. Wallin is not subject to any statutory disqualification, as that term is defined in Section 3(a)(39) of the Exchange Act. Mr. Wallin will not be compensated in connection with their participation in the offering by the payment of commissions or other remuneration based either directly or indirectly on transactions in our securities. Mr. Wallin is not, nor has he been within the past 12 months, a broker or dealer, and he is not, nor has he been within the past 12 months, an associated person of a broker or dealer. At the end of the offering, Mr. Wallin will continue to primarily perform substantial duties for the Company or on its behalf otherwise than in connection with transactions in securities. Mr. Wallin will not participate in selling an offering of securities for any issuer more than once every 12 months other than in reliance on Exchange Act Rule 3a4-1(a)(4)(i) or (iii).
 
The Company will receive all proceeds from the sale of the 5,000,000 shares being offered. The price per share is fixed at $7.00 for the duration of this offering, which is a period of 16 months from November 29, 2012. Although our common stock is not listed on a public exchange or quoted over-the-counter, we intend to seek to have our shares of common stock quoted on the OTC Bulletin Board or other U.S. trading exchange. In order to be quoted on the OTC Bulletin Board or other U.S. trading exchange, a market maker must file an application on our behalf in order to make a market for our common stock. We may not get a market maker that will agree to file the necessary documents with FINRA, and we not be able to get such an application for quotation approved.

The Company’s shares may be sold to purchasers from time to time directly by and subject to the discretion of the Company. Further, the Company will not offer its shares for sale through underwriters, dealers, agents or anyone who may receive compensation in the form of underwriting discounts, concessions or commissions from the Company and/or the purchasers of the shares for whom they may act as agents. The shares of common stock sold by the Company may be occasionally sold in one or more transactions; all shares sold under this prospectus will be sold at a fixed price of $7.00 per share for the duration of the offering, which is a period of 16 months from November 29, 2012.

In order to comply with the applicable securities laws of certain states, the securities will be offered or sold in those only if they have been registered or qualified for sale; an exemption from such registration or if qualification requirement is available and with which Accelera innovations, Inc. has complied. In addition and without limiting the foregoing, the Company will be subject to applicable provisions, rules and regulations under the Exchange Act with regard to security transactions during the period of time when this Registration Statement is effective.

The Company will pay all expenses incidental to the registration of the shares (including registration pursuant to the securities laws of certain states).

Plan of Distribution for the Offering of 4,456,880 Shares by the Selling Stockholders

As of the date of date of this filing, there is no market for our securities. We will attempt to have an application filed with the Financial Industry Regulatory Authority for our common stock to be eligible for trading on the OTC Bulletin Board or other U.S. trading exchange. Until our common stock becomes eligible for trading on the OTC Bulletin Board or other U.S trading exchange, the selling stockholders will be offering our shares of common stock at a fixed price of $7.00 per common share for the duration of the offering, which is a period of 16 months from the effective date of this prospectus. If our common stock becomes eligible for trading on the OTC Bulletin Board or other U.S. trading exchange, the selling stockholders may, from time to time, sell all or a portion of the shares of common stock on OTC Bulletin Board or other U.S. trading exchange, in privately negotiated transactions or otherwise. If and only after our common stock ever becomes eligible for trading on the OTC Bulletin Board or other U.S. trading exchange, such sales may be at fixed prices prevailing at the time of sale, at prices related to the market prices or at negotiated prices.

The outstanding shares of our common stock not included in the offering mentioned above will be available for sale in the public market as follows:
 
Public Float

Of our outstanding shares, as of December 31, 2012 approximately 17,309,469 shares are beneficially owned by executive officers, directors and affiliates (excluding shares of our common stock which may be acquired upon exercise of stock options and employee options which are currently exercisable or which become exercisable within 60 days of December 31, 2012).
 
 
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Rule 144

In general, under Rule 144 as currently in effect, once we have been subject to public company reporting requirements for 90 days, a person (or persons whose shares are aggregated) who is not deemed to have been an affiliate of ours at any time during the three months preceding a sale, and who has beneficially owned restricted securities within the meaning of Rule 144 for a least six months (including any period of consecutive ownership of preceding non-affiliated holders) would be entitled to sell those shares, subject only to the availability of current public information about us. A non-affiliated person who has beneficially owned restricted securities within the meaning of Rule 144 for at least one year would be entitled to sell those shares without regard to the provisions of Rule 144.

In general, under Rule 144 as currently in effect, once we have been subject to public company reporting requirements for 90 days, our affiliates or persons selling shares on behalf of our affiliates who own shares that were acquired from us or an affiliate of ours at least six months prior to the proposed sale are entitled to sell upon expiration of the lock-up agreements described above, within any three-month period beginning 90 days after the date of this prospectus, a number of shares that does not exceed the greater of:

1% of the number of shares of common stock then outstanding, which will equal approximately shares immediately after this offering; or

the average weekly trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.
 
Sales under Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.

DIVIDEND POLICY

We have not declared or paid dividends on our common stock since our formation, and we do not anticipate paying dividends in the foreseeable future. Declaration or payment of dividends, if any, in the future, will be at the discretion of our Board of Directors and will depend on our then current financial condition, results of operations, capital requirements and other factors deemed relevant by the Board of Directors. There are no contractual restrictions on our ability to declare or pay dividends. See the Risk Factor entitled “BECAUSE WE DO NOT INTEND TO PAY ANY CASH DIVIDENDS ON OUR COMMON STOCK, OUR STOCKHOLDERS WILL NOT BE ABLE TO RECEIVE A RETURN ON THEIR SHARES UNLESS THEY SELL THEM.”
 
 
ITEM 6. SELECTED FINANCIAL DATA

A smaller reporting company is not required to provide the information in this Item.
 
 
ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
OVERVIEW
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Our discussion includes forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements made which are not purely historical are forward-looking, and are based upon current expectations that involve risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated or implied in these forward-looking statements as a result of a number of factors, including those set forth In Item 1A -“Risk Factors” of this Annual Report on Form 10-K.  We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

Plan of Operation
 
Accelera Innovations, Inc. (“Accelera”), a Delaware corporation, is a healthcare service company which will initially focus on its technology assets that were licensed to the Company by our majority shareholder Synergistic Holdings, LLC (“Licensor”), a privately-held company organized under the laws of Illinois, pursuant to which the Company was granted a thirty (30) year exclusive, non-transferrable worldwide license for proprietary Internet-based, software platform that is fully functional in its current state (“Accelera Technology”) that is designed to provide interoperable technology that is intended to improve the quality of care while reducing the cost as described below.

 
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LICENSED TECHNOLOGY OVERVIEW

1.   Data Forms -  Topical Network Data Warehouse Architecture
2.   Axiom – Healthcare Specific Business Rules Engine.
3.  
Kinetic Forms – A Dynamic Web Page Generator.
4.  
VT Secure – Enterprise Security Framework
5.  
Patient Portal
6.  
Self-Management Disease Modules
7.  
Provider Portal
8.  
Private Label Applications
 
SOFTWARE DESCRIPTION

The Accelera Health Care Framework / Multi Vertical Health Care (MVHC) Technology comprises a suite of eight separate technologies described below;

Health Care Framework, Security, Business Rules, Data Integration, Patient Assessment, Medical Alerts, Biometric integration, Secure communication and networking, Data Mining on Large Data Sets (Mega Data).
 
Security Framework, Integrated into the Accelera’s Healthcare Framework is designed to provide enterprise level application and data security.
 
Assessment Engine: For clinical and self-health care and Wellness management.

Parallel Processing Data Mining Engine:  Patient Identification, Medical Informatics, Content Personalization. 

Suite of Products:

Data Forms –Topical Network, a data forming technology and framework that is designed to organize and efficiently deliver relevant information for large data sets (Mega Data) and which can ingest any data format into well-organized data structure designed specifically to communicate the other components of the Accelera Framework.

Axiom – Business Rules Engine is designed specifically for Healthcare which is data mining engine. Axiom is a parallel or simultaneous processing rules engine designed to apply complex rule-sets on very large dimensional data input to produce multiple result outputs.

Kinetic Forms – Dynamic Webpage Generator, a dynamic web based assessment engine that is intended to interfaces with data forms and Axiom.

VT Secure – Integrated into the Accelra Healthcare Framework, is designed to provide enterprise level security and is intended to protect applications and data and is designed to provide performance and scalability for secure medical data mining.

Patient Portal - Consumer-facing internet-based technology that is designed to encompass the following:
 
 
·
Connect between patient and provider through a fully secure two-way Patient Portal, including After Visit Summaries, patient messaging and care plan adherence alerts based on relevant health care protocols
 
·
Display relevant patient and care plan information in easy-to-understand onscreen and printable displays for patients and triaged formatting for caregivers.
 
·
Provide patient behavior modifications self-management modules 
 
·
Allow third party access into the patient portal
 
·
Create Personal Health Records (PHR) that are personalized based on patient condition for patient care and messaging
 
 
 
 
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Self-Management Disease Modules - Provider and Consumer-facing internet-based technology that is designed to encompass the following:

·  
Interactive disease management tools that focus on chronic health conditions. It is designed to include content indexed to specific triggers within a disease state
·  
Personalized based on  National Drug Code (NDC), and Current Procedural Terminology (CPT4) codes
·  
Proprietary messaging based on CMS Medicare/Medicaid established triggers
·  
Valid and reliable behavioral health triggers that facilitate care plan adherence and compliance 
 
Provider Portal - Provider-facing internet-based technology that is designed to encompass the following:
 
 
·
Dashboard access to Patient Portal inputs at the patient level
 
·
Summary access to disease management adherence & compliance messaging alerts
 
·
Direct input into patient health records
 
·
Direct recommendations to the patient

Private Label Applications

Accelera EMR- A certified Electronic Medical Record application designed to be used primarily in physician offices to automate the patient’s clinical chart and meet the ARRA (Federal Mandated Meaningful Use) criteria.
 
Accelera PM -The Practice Management application designed to be used primarily in physician offices to automate the physician’s revenue cycle management system.
 
Accelera Patient Portal - The Patient Portal application designed to be used as a communication tool between patient and physician office staff. This application is intended to allow the patient to access their medical record information in a secure environment.
 
Accelera HIE - The Health Information Exchange application is intended to allow  providers and payors of healthcare to exchange secure data by creating the continuum of care for the patient, and decreasing healthcare cost.
 
Accelera ACO - The Accountable Care Organization application needed to operate an ACO environment. This application is designed to offers the ACO business the ability to report to CMS the usage of Medicare benefits and is intended to provide tools to lower the cost of patient care.
 
Accelera HIS - The Hospital Information System application is designed to includes all applications to manage most hospital information systems. The department applications included in the HIS are as follows:
 
Patient Master; Appointments, Outpatient Management; Inpatient Management; Emergency Department; Patient Billing; Claims Management; Provider Fee Management; Accounts Receivable; Duplicate Registration; Medical Records; System Master; System Configuration, Resource Scheduler; CPOE; Clinical Decision Support System; Clinical Documentation; Barcode Medication Administration; Laboratory Management System; Radiology System; PACS; Pharmacy Management System; Materials/Supply Management System; Operating Room Management System; Nursing Management; Blood Bank System; Dietary Management System; Hospital Patient Portal.
 
Accelera, intends to provide its cloud based healthcare services through monthly or yearly subscription agreements (“software-as-a-service” also known as “SaaS”) to the healthcare industry. The Company intends on positioning itself as a technology and service solution for providers and payers such as the hospitals, medical offices, medical insurance companies, Accountable Care Organizations, Patient Centered Medical Homes, and Provider Service Networks who are seeking to create an interoperable technology platform that is patient-centric.
 
The coordinated care would begin with the office visit using the Accelera Practice Management and Electronic Medical Record applications. The provider may also access disparate patient consults and share the patient’s record using the Accelera Health Information Exchange and Portal.  When the patient is admitted to the hospital setting, all of the functions are intended tobe automated using the Accelera Hospital Information System. The physician would continue to have full access to the patient’s information to receive accurate and efficient information. If the primary care physician is part of an Accountable Care Organization, then those reports required by Center for Medicare and Medicaid will be created and distributed using the Accelera Accountable Care Organization application.
 
The Accelera Patient Management Record is designed to identify patients with preventable, yet escalating associated costs, then directs intense online self-management services to improve the quality-of-life for the patient and deliver more effective health information. Patients would be electronically triaged using the Center for Medicare and Medicaid (CMS) rule-set for disease management, as well as proprietary evidence-based disease management rules. These rules are based on clinical standards from major health organizations.. This is intended to allow providers, as well as patients, to monitor care through targeted interventions. The technology platform is intended to allow healthcare providers to anticipate patient care needs, motivate patient compliance, activate evidence-based standards of care, and improve efficiency.

 
 
 
38

 
 
 
The Accelera Analytic product is designed for potential customers that include healthcare payers, provider organizations, government entities worldwide, and employer groups. Accelera products are designed to identify, analyze, and minimize healthcare risk by data mining and predictive analysis while containing costs and improving the quality of care. Accelera also intends to develop modeling software to predict medical costs and help improve the financing, organization, and delivery of health services.
 
The Accelera Security solution is designed to reduce or stop the security breach at the point of care, by auditing the user and encasing the applications in a discrete shell.  Without proper access, the application will separate the data elements from each other, patient name will not be associated with demographic or clinical information.   Patient data is split into two parts, the patient identifier is separated from the clinic/medical data and both are encrypted. An encrypted data key unlocks the dual encryption bringing the information together and is intended to increase patients’ confidence in the information technology utilized.

The Accelera Solution is designed to improve patient care, reduce costs, eliminate redundant data entry, improve operational efficiency, but most importantly, bring together long term needs of the caregivers and is intended to satisfy the business requirements of the healthcare enterprise.
 
 The intended benefits of our solutions for potential customers include: 

·  
Lowers administration costs through a less invasive call-back system - email alerts, text messages, online alerts

·  
A benefit of batch health care analytics is the use of "predictive modeling across multiple clinical conditions.  This process is designed to identify undiagnosed conditions for patients within an insurer's patient population, or suggest interventions to prevent conditions from developing.

·  
Reducing occurrences and  cost related to a healthcare data breaches.

·  
Reducing the hardware environment and cost by using our cloud technology.

·  
Increased Mobility.

·  
Improving patient care and safety.

·  
Helping healthcare organizations maintain their market positions and meet their financial commitments.
 
Our current plans, predicated on raising $35,000,000 from the sale of 5,000,000 shares of common stock in this offering and will allow the Company to meet the milestones and requirements of its Business Plan and avoid discontinuation of the license. Funding would be required for staffing, marketing, public relations and the necessary research precedent to expanding the scope of its offering to include the global market. The Company intends to approach Hedge Funds, Venture Capital Groups, Private Investment Groups and other Institutional Investment Groups in its efforts to achieve future funding. It is estimated that $9,874,940 will be used for management, sales and marketing, $17,680,122 will be used for infrastructure and software fees and an estimated $4,417,978 will be spent on legal, accounting, rent and other payables leaving $3,026,960 in reserve for increased working capital.
 
(b) Management's Discussion, Analysis of Financial Condition and Results of Operations

The Company has conducted minimal operations since inception. No revenue has been generated by the Company from April 29, 2008 (Inception) to December 31, 2012. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management’s plan includes obtaining additional funds by equity financing and/or related party advances, however there is no assurance of additional funding being available. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might arise as a result of this uncertainty.
 
In order to meet our need for cash we are attempting to raise money from the primary offering. There is no assurance that we will be able to raise enough money through the primary offering to stay in business. Whatever money we do raise, will be applied first to costs of this offering and then to deploy the Company’s licensed technology. If we do not raise all of the money we need from the primary offering, we will have to find alternative sources, such as a second public offering, a private placement of securities, or loans from our officer or director or others. Our director is unwilling to make any commitment to loan us any money at this time. At the present time, we have not made any arrangements to raise additional cash, other than through the primary offering. If we need additional cash and can't raise it we will either have to suspend operations until we do raise the cash, or cease business entirely.
 
 
39

 
 
Our current plans, predicated on raising $35,000,000 from the sale of 5,000,000 shares of common stock in this offering and will allow the Company to meet the milestones and requirements of its Business Plan and avoid discontinuation of the license. Funding would be required for staffing, marketing, public relations and the necessary research precedent to expanding the scope of its offering to include the global market. The Company intends to approach Hedge Funds, Venture Capital Groups, Private Investment Groups and other Institutional Investment Groups in its efforts to achieve future funding. It is estimated that $9,874,940 will be used for management, sales and marketing, $17,680,122 will be used for infrastructure and software fees and an estimated $4,417,978 will be spent on legal, accounting, rent and other payables leaving $3,026,960 in reserve for increased working capital.
 
We expect to use the proceeds from our offering for infrastructure and software, sales and marketing, employee compensation, legal fees, accounting fees, rent and other payables to deploy our technology. The Company’s technology platform is fully functional in its current state and is anticipated to be marketed into metropolitan markets with an estimated expenditure of approximately $16 million through December 31, 2013, and approximately $19 million through December 31, 2014 for general corporate purposes, for which proceeds we have an estimated plan. In detail, over the first twelve months after financing it is estimated that the Company will utilize an estimated $24 million of the offering for the following milestones: Infrastructure; Transfer our licensed software technology from internal Company servers to a data center facility with redundant backup systems, it is estimated this will take three months at an estimated cost of $3 million and an estimated $250,000 per month thereafter for expansion and service fees totaling $5.2 million over the first twelve months from financing. Software Fees: Under our Licensing Agreement with Synergistic Holdings LLC, the Company is to pay $5 million on July 13, 2012 that was verbally extended by Licensor to July 13, 2013 and $7.5 million on April 13 2014 for a total of $12.5 million in licensing fees over the next twelve months. Sales and Marketing: The Company intends to provide its cloud based healthcare services through monthly or yearly subscription agreements (“Software-as-a-Service” also known as “SaaS”) to the healthcare industry. It is estimated that the Company will grow from the current three full time employees marketing the product to twenty-three within the next six months including management, advertising, tradeshows and travel expenses at an estimated cost of 2.2 million and growing to fifty-seven people including management and all sales and marketing activity within the next twelve months totaling an estimated cost of $5.3 million. Legal fees, Accounting fees, Rent and other payables: The Company estimates these fees to be an estimated $950,000 over the next twelve months. The above mentioned expenditures meet the Company’s requirement under the Licensing Agreement to advance the licensed technology as agreed.
 
It’s estimated that if the Company cannot accomplish the milestones described above due to lack of financing the Company’s product offering will be delayed. The minimum amount of capital the Company needs to raise over the next twelve months is $1 million to continue operations. There is no guarantee that the Company will be able to raise this or any amount of additional capital and a failure to do so would have a significant adverse effect on the Company’s ability, or would cause significant delays in its ability to address the market for content delivery and achieve its Business Plan. Neither the Company nor any of its advisors or consultants has significant experience in raising funds similar to the $35,000,000 estimated to be required.
 
Our business may not materialize in the event we are unable to execute on our plan described in our prospectus. The events or circumstances that may prevent the accomplishment of our business objectives, include, without limitation, (i) the fact that, if we do not raise a minimum of US $5,000,000 of additional funding by July 13, 2013, an additional $7,500,000 by April 13, 2014, an additional $10,000,000 April 13, 2015 and an additional $7,500,000 by April 13, 2016 equaling the minimum funding requirement of $30,000,000 for the deployment of its licensed technology over the next three years we will lose the rights to the licensed technology, (ii) If physicians and hospitals do not accept our products and services, or delay in deciding whether to purchase our products and services. (iii) If we are forced to reduce our prices, our business, financial condition and results of operations could suffer, (iv) we are subject to a number of existing laws, regulations and industry initiatives, non-compliance with certain of which could materially adversely affect our operations, (v) the Company’s need for and ability to obtain additional financing, (vii) the possibility that the Company may not be able to secure approvals and other governmental clearances necessary to carry out the Company’s deployment and development plans, and (viii) the exercise of voting control the Company’s officers and directors collectively hold of the Company’s voting securities.

We had no cash reserves as of December 31, 2012,. Until we actually commence our deployment program, our monthly cash requirements are minimal.

Going Concern

Because we had no cash at December 31, 2012, which is insufficient to fund any operations, the report of our independent registered public accounting firm on our financial statements for the period ended December 31, 2012 contains an explanatory paragraph regarding their substantial doubt about our ability to continue as a going concern. Our auditors’ opinion is based upon our operating losses and our need to obtain additional financing to sustain operations.  Our ability to continue as a going concern will be dependent upon our ability to obtain the necessary financing to meet our obligations and repay our liabilities when they become due, and to generate sufficient revenues from our operations to pay our operating expenses.  We will need to raise substantial funds in order to develop the technology which we have recently licensed from Synergetic Holding, LLC, and if we cannot raise additional funds we may need to abandon development of these products and cease operations.

 
40

 

Results of Operations

The following is a summary of the Company’s operational results for the years ended December 31, 2012 and 2011:
 
   
2012
   
2011
 
             
Total operating expenses
 
$
5,113,584
   
$
158,442
 
Total other income (expense)
   
---
     
--
 
Net loss
 
$
(5,113,584
 
$
(158,442
 
For the period from inception (April 29, 2008) through December 31, 2012, the Company had no activities that produced revenues from operations and had a net loss of $(5,289,665), consisted of $5,000,000 for the estimated fair value of stock-based compensation and $289,665 due to legal, accounting, audits and other professional service fees incurred in relation to the formation of the Company and the filing of the Company’s Registration Statement on Form 10 filed in August 2008, our Form S-1 filed in May of 2012 and other SEC-related compliance matters.
 
Stock-based Compensation

The Company recognizes stock-based compensation expense in its statement of operations based on estimates of the fair value of employee stock option and stock grant awards as measured on the grant date. For stock options, the Company uses the Black-Scholes option pricing model to determine the value of the awards granted. The Company amortizes the estimated value of the options as of the grant date over the stock options’ vesting period, which is generally four years.
 
The Company has estimated the value of common stock into which the options are exercisable at $4 per share for financial reporting purposes. This amount was determined based on the price our stock was sold for in past private placements, the minimum stock price required for listing on any Nasdaq market, and the amount also approximates a $85 million valuation for the entire Company, which is considered “micro-cap” by most equity analysts. The stock based compensation expense is an estimate and significant judgment was involved in attempting to determine the value of common stock. The Company’s common stock has never traded publicly, and no stock has traded in private markets either, except for privately negotiated sales to the founder and other private investors of the company and the founder of the technology from which the company subsequently licensed rights. The Company does not have any offers for purchase of its common stock in any stage, and no stock is registered for resale with the Securities and Exchange Commission.
 
The Company believes the only material estimate used in estimating the value stock options was the estimated fair value of the common stock, and that assumed volatility, term, interest rate and dividend yield changes would be not result in material differences in stock option valuations. Based on the assumed value of common stock, the grant-date fair value of options granted during the year ended 2012 was $5,000,000. The Company recognized stock-based compensation expense of $5,000,000 and $0 during the year ended 2012 and 2011, respectively, which were included in general and administrative expenses. As of December 31, 2012, there was $10,000,000 of total unrecognized compensation cost related to unvested stock-based compensation awards, which is expected to be recognized over the weighted average remaining vesting period of approximately 3.3 years.
 
 
41

 
 
The following is a summary of the outstanding options, as of December 31, 2012:
         
                           
               
Weighted Average
   
Options
   
Options
   
Intrinsic
   
Exercise
 
Remaining
   
Outstanding
   
Vested
   
Value
   
Price
 
Term
Options, December 31, 2011
    -       -     $ -     $ -    
Granted
    -       -                    
Exercised
    -       -                    
Forfeited / expired
    -       -                    
Options, December 31, 2011
    -       -                    
Granted
    3,750,000       1,250,000     $ 4.00     $ 0.0001  
3.3 years
Exercised
    (750,000 )     -                    
Forfeited / expired
    -       -                    
Options, December 31, 2012
    3,000,000       1,250,000                    
                                   
 
Weighted average assumptions in the calculation of option value:
 
Historical Volatility
268.0%
 
Risk Free Rate
0.83%
 
Dividend Yield
0.00%
 
Forfeiture Rate
0.00%
 
 
The Company has reserved a total of 5,125,000 shares of common stock for issuance under its stock award plan, and 1,375,000 of these shares remained available for future issuance as of December 31, 2012.
 
Limited Business History; Need for Additional Capital
 
There is no historical financial information about the Company upon which to base an evaluation of our performance. We are an emerging grow stage corporation and have not generated any revenues from our business. We cannot guarantee we will be successful in our business plans. Our business is subject to in the exploration and/or development, and possible cost overruns due to price and cost increases in services. We have no intention of entering into a merger or acquisition within the next twelve months and we have a specific business plan and timetable to complete our business risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays plan moving forward.
 
We anticipate that additional funding will be in the form of equity financing from the sale of our common stock or loans from our director or officers. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of shares to fund additional expenditures. We do not currently have any arrangements in place for any future equity or loan financing. Our limited operating history and our lack of significant tangible capital assets makes it unlikely that we will be able to obtain significant debt financing in the near future. If such financing is not available on satisfactory terms, we may be unable to continue or expand our business. Equity financing could result in additional dilution to existing shareholders.
 
If we raise the $35,000,000 gross, in the primary offering, we believe that we can pay for our offering expenses and satisfy our cash requirements without having to raise additional funds for the next twenty-four months.
 
Liquidity and Capital Resources
 
As of December 31, 2012 and 2011, the Company had a total of $0 and $5,874 in assets, respectively and the Company no liabilities as of December 31, 2012 and 2011, respectively. The following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities for the years ended December 31, 2012 and 2011:
 
   
2012
   
2011
 
Net Cash Used In Operating Activities
 
$
(113,543
 
$
(176,081
Net Cash Used In Investing Activities
   
-
     
-
 
Net Cash Provided By Financing Activities
   
107,710
     
181,955
 
Net Increase (Decrease) In Cash
 
$
(5,874
 
$
5,874
 
 
 
42

 
 
Our principal sources of liquidity are our cash and the cash flow provided by the shareholder advances and equity financing. We believe that further equity financing is needed to satisfy our anticipated cash requirements through the next 12 months.
 
As of December 31, 2012, we had a cash balance of only $0 and no other assets. We have an accumulated deficit during our development stage and no means to pay liabilities in excess of our assets. AVP has agreed to fund certain administrative operating expenses of Accelera until the Company succeeds in raising additional funds, at which point the administrative operating expenses will be due. However, AVP may seek to force earlier payment of the amounts which we owe, or AVP may decide in the future not to continue funding costs on behalf of Accelera, although we are not aware of any plans for them to do so. If we are not successful in raising additional capital, we may not be able to pay our liabilities that arise and may have to cease operations.
 
We have a consulting agreement with AVP under which AVP has agreed to provide us with certain advisory services that include reviewing our business plan, identifying and introducing prospective financial and business partners, and providing general business advice regarding our operations and business strategy. Under the consulting agreement, cash compensation of $400,000 is due to AVP upon our securing $5 million in available cash from funding, and an additional $800,000 is due upon our securing $15 million in available cash from funding (inclusive of the first $5 million). The cash compensation is to be paid to AVP at the rate of $50,000 per month. The total cash compensation to be received by AVP under the consulting agreement is not to exceed $1,200,000 unless we receive an amount of funding in excess of $15 million. If we receive equity or debt financing that is an amount less than $5 million, in between $5 million and $15 million, or greater than $15 million, the cash compensation earned by the AVP under its consulting services agreement will be prorated. We have the option to make a lump sum payment to AVP in lieu of the monthly cash payments.
 
The Company will not be able to commercialize its technology without additional capital, if we do not raise additional funds of at least $30 million for the advancement of its technology over the next three years it will lose its rights to the technology. The Company will require significant additional financing in order to meet the milestones and requirements of its Business Plan and avoid discontinuation of the License. Funding would be required for staffing, marketing, public relations and the necessary distribution to expanding the scope of its offering to include the global market. The Company intends to seek an aggregate of $35,000,000 in 2013 and 2014 through the sale of equity or convertible debt securities, the issuance of these securities could dilute existing shareholders. The Company’s funding plans include selling additional capital stock and/or borrowing to fund the aforementioned expenses. The Company intends to approach Hedge Funds, Venture Capital Groups, Private Investment Groups and other Institutional Investment Groups in its efforts to achieve future funding.
 
We plan to measure our future liquidity primarily by the cash and working capital available to fund our operations, if we are ever able to raise capital. To date we have not raised any capital and, accordingly, do not have any capital available to fund our operations, as stated above. We will not be able to commercialize our products and services without additional capital. We are evaluating various means of raising our initial capital, including through the sale of equity securities, licensing agreements or other means. We expect to incur losses for at least several years into the future as we develop and deploy our products and services and we are unable to estimate when, if ever, we will receive revenue or have a positive cash flow.
 
The Company’s auditor has expressed in his report conditions that raise substantial doubt about the Company’s ability to continue as a going concern. In support of the Company’s efforts and cash requirements, it has relied on advances from the majority shareholder and related parties until such time that the Company can support its operations through the generation of revenue or attains adequate financing through sales of its equity and/or traditional debt financing. The majority shareholder has expressed continued support; however there is no formal written commitment for continued support by the shareholder or any other source. Funds that have been advanced or paid in satisfaction of liabilities has been contributed to equity in exchange for common shares. There is no written or oral commitment to continue such funding.

Off Balance Sheet Arrangements
 
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
 
 
43

 
 
We intend to continue to have our acting Chief Financial Officer prepare our quarterly and annual financial statements and have these financial statements reviewed or audited by our independent auditor. Our independent auditor is expected to charge us approximately $5,000 to review our quarterly financial statements and approximately $13,000 to audit our annual financial statements. In the next twelve months, we anticipate spending approximately $25,000 to pay for our accounting and audit requirements.
 
Critical Accounting Policies and Use of Estimates

Our significant accounting policies are more fully disclosed in Note 1 to our financial statements. However, some of our accounting policies may be more particularly important to the portrayal of our financial position and results of operations and require the application of significant judgment by our management. To date, due to our limited operations, we do not believe any specific accounting policies have required significant judgment or use of estimates, other than our assumption that we will continue as a going concern, as described above. If we succeed in securing additional financing and commencing research and development activities, we expect the preparation of our financial statements will require a greater number of estimates and more significant judgment. We currently believe the following critical accounting policies will require significant judgments and estimates in the preparation of our future financial statements.

Stock-Based Compensation

We plan to account for stock awards granted to recipients using an estimate of the fair value of the stock award on the date that the award is granted. This estimated fair value will be recognized as an expense in the statement of operations on a straight-line basis over the vesting period of the underlying stock option, generally four years for employees. There is a high degree of subjectivity involved in estimating the input values needed to estimate the fair value of stock options and other awards. For Accelera in particular, our stock has never traded and therefore it will be difficult to determine the underlying fair value of our common stock on each date a stock award is made. Changes in any of the assumptions required to estimate the fair value, particularly the estimated value of the underlying stock and the estimated volatility, as well as the estimated term of the options, can materially affect the resulting estimates of the fair values of the awards that are granted. Also, the expenses recorded for stock-based compensation in our financial statements may differ significantly from the actual value realized by the recipients of the stock options, and these expenses are not adjusted to the actual amounts, if any, realized by the stock option recipients. Users of the financial statements should also understand that the expenses we recognize for stock-based compensation do not result in payments of cash by us.

Revenue recognition
 
While we do not expect to have any products ready for commercial sale, if at all, we may enter into contractual arrangements with other entities that provides us with revenue before our products are deployed. Under such contractual arrangements, if we succeed in entering into any, we plan to recognize revenues when our performance requirements have been fulfilled, the amount of revenue is fixed and determinable, and collection is reasonably assured.

Revenue from license fees with non-cancelable, non-refundable terms and no future performance obligations would be recognized when collection is assured. Milestone payments would be recognized when we fulfill the development milestone requirements and collection is assured. We expect that future royalty revenue, if any, would be recorded when payments are received, since we do not expect that we will be able to reasonably estimate the sales upon which the royalties are based.

If we enter into revenue arrangements with multiple components, we expect to divide the components into separate units of accounting. Consideration received would be allocated among the separate units of accounting based on their relative fair values, and the applicable revenue recognition criteria identified and applied to each of the units.

Research and Development Expenses
 
If the Company is successful in raising additional capital, the Company expects to incur research and development costs which will be expensed as incurred. Research and development costs may include further development of the technology and software, trial costs, development and manufacturing costs, payments to clinical and contract research organizations, compensation expenses for heathcare development personnel, consulting and advisor costs and other costs related to development of its product. Research and development expenses may also include certain expenses that are incurred over multiple reporting periods, such as fees for contractors and consultants.. Management plans to assess the level and related costs of the services provided during each reporting period, including the percentage of work completed through each reporting period, to determine the portion to expense in each period. Management expects the assessment of the percentage of work completed in any given period to often require significant judgment and plans to base its estimates on the information available at the time.

 
44

 
 
Recent Accounting Pronouncements
 
We recently commenced our operations and do not believe that there are any recently issued accounting pronouncements that we have not adopted which are likely to have a material impact on our financial position, results of operations or other disclosures.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Not applicable.
 
 
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 
45

 

Accelera Innovations
Index to Financial Statements
For the years ended December 31, 2012 and
For the Period April 29, 2008 (date of inception) through December 31, 2012


 
Page
Financial Statements:
 
   Report of Independent Registered Public Accounting Firms
F-2
   Balance Sheets
F-4
   Statements of Operations
F-5
   Statement of Changes in Shareholder’s Equity
F-6
   Statements of Cash Flows
F-7
   Notes to Financial Statements
F-8


 
F-1

 

 
 
Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders
Accelera Innovations, Inc.
(A Development Stage Company)

We have audited the accompanying balance sheet of Accelera Innovations, Inc. (a development stage company) as of December 31, 2012 and the related statement of operations, changes in stockholder's equity and cash flows for the year then ended and for the period from inception (April 29, 2008) to December 31, 2012. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of the Company as of December 31, 2011, were audited by other auditors, whose report, dated April 11, 2012, expressed an unqualified opinion on those financial statements.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our audit also includes assessing the accounting principles used and significant estimates made by management, as well as, evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Accelera Innovations, Inc.(a development stage company) as of December 31, 2012 and the results of its operations and its cash flows for the year ended December 31, 2012 and the period from inception (April 29, 2008) to December 31, 2012 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has had no revenue and accumulated deficit of $5,289,665 and may be unable to raise further equity. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


/s/ Anton & Chia LLP
Newport Beach, CA
April 9, 2013
 
 
F-2

 
 

 
Peter Messineo
Certified Public Accountant
1982 Otter Way Palm Harbor FL 34685
peter@pm-cpa.com
T   727.421.6268   F   727.674.0511

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders:
Accelera Innovations, Inc.
Foster City, CA 94404

I have audited the balance sheets of Accelera Innovations, Inc., (formerly Accelerated Acquisition IV, Inc.) as of December 31, 2011 and 2010 and the related statement of operations, changes in stockholder’s equity, and cash flows for the year ended December 31, 2011 and for the periods April 29, 2008 (date of inception) through December 31, 2011 and 2010. These financial statements are the responsibility of the Company’s management.  My responsibility is to express an opinion on these financial statements based on my audits.

I conducted my audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that I plan and perform the audits to obtain reasonable assurance about whether the financial statements were free of material misstatement.  The Company was not required to have, nor was I engaged to perform, an audit of its internal control over financial reporting.  My audit included consideration of internal control over financial reporting as a basis for designing audit procedures that were appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, I express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  I believe that my audit provide a reasonable basis for my opinion.

In my opinion, the financial statements, referred to above, present fairly, in all material respects, the financial position of the Company as of December 31, 2011 and 2010, and the results of its operations and its cash flows for the year ended December 31, 2011 and for the periods April 29, 2008 (date of inception) through December 31, 2011 and 2010, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  As discussed in Note 2 to the financial statements, the Company has no revenues from operation, has not emerged from the development stage, and is requiring traditional financing or equity funding to commence its operating plan.  These conditions raise substantial doubt about the Company’s ability to continue as a going concern.  Further information and management’s plans in regard to this uncertainty were also described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Peter Messineo, CPA
Peter Messineo, CPA
Palm Harbor, Florida
February 16, 2012
except for Note 7, which date is April 11, 2012
 
 
F-3

 
 
 
Accelera Innovations, Inc.
 
(A Development Stage Company)
 
BALANCE SHEET
 
   
   
December 31,
   
December 31,
 
   
2012
   
2011
 
             
ASSETS
           
Current Assets
           
Cash
  $ -     $ 5,874  
Total Current Assets
    -       5,874  
                 
TOTAL ASSETS
  $ -     $ 5,874  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Current Liabilities
               
Accounts payable
  $ -     $ -  
Total Current Liabilities
    -       -  
                 
TOTAL LIABILITIES
    -       -  
                 
Stockholders' Equity
               
Preferred stock; $0.0001 par value; 10,000,000 shares
               
authorized; 0 shares issued and outstanding
    -       -  
Common stock: $0.0001 par value; 100,000,000 authorized.
               
21,311,812 and 20,539,975 shares issued and outstanding
    2,131       2,054  
Additional paid in capital
    5,287,534       179,901  
Accumulated deficit during development stage
    (5,289,665 )     (176,081 )
Total Stockholders' Deficit
    -       5,874  
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  $ -     $ 5,874  
 
The accompanying notes are an integral part of these financial statements.
 
 
F-4

 
 
Accelera Innovations, Inc.
(A Development Stage Company)
STATEMENT OF OPERATIONS
 
                   
               
29-Apr-08
 
               
(inception)
 
   
For the Year Ended
   
through
 
   
December 31,
   
December 31,
 
   
2012
   
2011
   
2012
 
                   
                   
Revenues
    -       -       -  
                         
EXPENSES
                       
Operating Expenses
    -        -          
Professional fees
    -       -       -  
Public expense
                    -  
General and administrative
    5,113,584       158,442       5,289,665  
   Total operating expenses
    5,113,584       158,442       5,289,665  
                         
NET LOSS
  $ (5,113,584 )   $ (158,442 )   $ (5,289,665 )
                         
BASIC AND DILUTED LOSS PER SHARE
  $ (0.25 )   $ (0.01 )        
                         
WEIGHTED AVERAGE NUMBER OF
                       
SHARES OUTSTANDING,  BASIC AND
DILUTED
    20,934,808       13,457,652          
 
The accompanying notes are an integral part of these financial statements.
 
 
F-5

 
 
 
Accelera Innovations, Inc.
 
(A Development Stage Company)
 
Statements of Stockholders’ Equity
 
 
               
Additional
   
Accumulate
Deficit During
       
   
Common Stock
         
Paid in
   
Development
       
   
Shares
   
Amount
   
Capital
   
Stage
   
Total
 
                               
Balance at Inception, April 29, 2008
   
-
   
$
-
   
$
-
   
$
-
   
$
-
 
                                         
Issuance of common stock for cash:
                                       
Issuance of common stock for cash, at inception, $.001 per share
   
5,000,000
   
$
500
     
3,500
             
4,000
 
                                         
Net loss
                           
(3,256
)
   
(3,256
)
                                         
Balance, December 31, 2008
   
5,000,000
     
500
     
3,500
     
(3,256
)
   
744
 
                                         
Net loss
                           
(6,792
)
   
(6,792
)
                                         
Balance, December 31, 2009
   
5,000,000
     
500
     
3,500
     
(10,048
)
   
(6,048
)
                                         
Net loss
                           
(7,591
)
   
(7,591
)
                                         
Balance, December 31, 2010
   
5,000,000
     
500
     
3,500
     
(17,639
)
   
(13,639
)
                                         
Shares tendered by founder, June 2011
   
(3,750,000
)
   
(375
)
   
375
             
-
 
Issuance of stock under stock option, June 2011
   
2,250,000
     
225
     
(225
)
           
-
 
Issuance of stock under subscription, June 2011
   
17,000,000
     
1,700
                     
1,700
 
Stock issued for cash, September 2011, at $4.00
   
2,500
     
-
     
10,000
             
10,000
 
Stock issued for cash, October 2011, at $4.00
   
26,000
     
3
     
103,997
             
104,000
 
Stock issued for cash, November 2011, at $4.00
   
3,000
     
-
     
12,000
             
12,000
 
Stock issued for cash, December 2011, at $4.00
   
8,475
     
1
     
33,899
             
33,900
 
                                     
-
 
Forgiveness of shareholder loans
                   
16,355
             
16,355
 
                                     
-
 
Net loss
                           
(158,442
)
   
(158,442
)
                                         
Balance, December 31, 2011
   
20,539,975
     
2,054
     
179,901
     
(176,081
)
   
5,874
 
                                         
Stock issued for cash, January 3, 2012, at $4.00
   
1,500
     
-
     
6,000
             
6,000
 
Stock issued for cash, January 24, 2012, at $4.00
   
1,000
     
-
     
4,000
             
4,000
 
Stock issued for cash, February 6, 2012, at $4.00
   
75
     
-
     
300
             
300
 
Stock issued for cash, February 24, 2012, at $4.00
   
312
     
-
     
1,250
             
1,250
 
Stock issued for cash, March 2, 2012, at $4.00
   
1,025
     
-
     
4,100
             
4,100
 
Stock issued for cash, March 13, 2012, at $4.00
   
3,000
     
-
     
12,000
             
12,000
 
Stock issued for cash, April 3, 2012, at $4.00
   
5,000
     
1
     
19,999
             
20,000
 
Stock issued for cash, April 13, 2012, at $4.00
   
5,000
     
1
     
19,999
             
20,000
 
Stock repurchase for cash April 14, 2012
   
(75
)
   
-
     
(300
)
           
(300
)
Stock issued for cash, May 2, 2012, at $4.00
   
3,000
     
-
     
12,000
             
12,000
 
Stock issued for cash, May 7, 2012, at $4.00
   
2,000
     
-
     
8,000
             
8,000
 
Forgiveness of shareholder loans
           
-
     
20,360
             
20,360
 
Shares issued for cash less exercise of options
   
750,000
     
75
     
 (75)
             
0
 
Fair value of option vested
                   
5,000,000
             
5,000,000
 
                                         
Net loss
                           
(5,113,584
)
   
(5,113,534
)
                                         
Balance, December 31, 2012
   
21,311,812
    $
2,131
    $
5,287,534
    $
(5,289,665
)
 
$
0
 
 
The accompanying notes are an integral part of these financial statements.

 
F-6

 
 
 
Accelera Innovations, Inc.
 
(A Development Stage Company)
 
STATEMENTS OF CASH FLOWS
 
                   
               
April 29, 2008
 
               
(inception)
 
   
For the Year Ended
   
through
 
   
December 31,
   
December 31,
 
   
2012
   
2011
   
2012
 
                   
OPERATING ACTIVITIES:
                 
 Net loss
 
$
(5,113,584
)
 
$
(158,442)
   
$
(5,289,665
)
Adjustment to reconcile net loss to net cash used in operations:
                       
   Stock based compensation
   
5,000,000
     
-
     
5,000,000
 
Changes in operating assets and liabilities:
                       
   Accounts payable and accrued expenses
   
-
     
-
     
-
 
                         
Net Cash used in Operating Activities
   
(113,584
)
   
(158,442)
     
(289,665)
)
                         
                         
FINANCING ACTIVITIES:
                       
Proceeds from common stock issuance
   
87,650
     
165,600
     
253,250
 
Purchase of treasury stock
   
(300)
     
-
     
(300)
 
Shareholder advances
   
20,360
     
16,355
     
36,715
 
Net Cash Provided by Financing Activites
   
107,710
     
181,955
     
289,665
 
                         
Net increase (decrease) in cash
   
      (5,874
   
(5,874
)
   
-
 
Cash, beginning of period
   
      5,874
             
-
 
Cash, end of period
 
$
-
   
$
5,874
   
$
-
 
                         
Supplemental disclosure of non-cash investing and financing activities:                        
Common shares issued for cashless exercise of stock options
  $
75
     
    $
75
 
Forgiveness of debt by shareholder
  $
20,360
     
-
    $
20,360
 
 
The accompanying notes are an integral part of these financial statements.
 
 
F-7

 

Accelera Innovations, Inc.
(A Development Stage Corporation)
Notes to Financial Statements
 
 
1. Background Information

Accelera Innovations, Inc., formerly Accelerated Acquisitions IV, Inc. (“the Company”) was incorporated in the state of Delaware on April 29, 2008 for the purpose of raising capital that is intended to be used in connection with its business plan which may include a possible merger, acquisition or other business combination with an operating business.
 
The Company is currently in the development stage.  All activities of the Company to date relate to its organization, initial funding, share issuances and regulatory compliance.

On June 13, 2011, Synergistic Holdings, LLC (“Purchaser”) agreed to acquire 17,000,000 shares of the Company’s common stock par value $0.0001 for a price of $0.0001 per share. At the same time, Accelerated Venture Partners, LLC agreed to tender 3,750,000 of their 5,000,000 shares of the Company’s common stock par value $0.0001 for cancellation. Following these transactions, Synergistic Holdings, LLC owned 93.15% of the Company’s 18,250,000 issued and outstanding shares of common stock par value $0.0001 and the interest of Accelerated Venture Partners, LLC was reduced to approximately 6.85% of the total issued and outstanding shares. Simultaneously with the share purchase, Timothy Neher resigned from the Company’s Board of Directors and John Wallin was simultaneously appointed to the Company’s Board of Directors. Such action represents a change of control of the Company.

On October 18, 2011 the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of Delaware and change its name from Accelerated Acquisition IV, Inc. to “Accelera Innovations, Inc.”

Accelera Innovations, Inc. (“Accelera”) is a healthcare service company that will initially focus on its sole asset that was licensed to the Company by Synergistic Holdings, LLC (“Licensor”), a privately-held company organized under the laws of Illinois to further develop, pursuant to which the Company was granted a thirty (30) year exclusive, non-transferrable worldwide license for proprietary Internet-based, software (“Accelera Technology”) that improves the functionality and performance of healthcare services by making clinical healthcare data available to healthcare consumers. This relevant data is intended to serve as the backbone for self-management tools that will allow these same healthcare consumers to facilitate the self-management portion of their doctor-prescribed care plan and focus on the mostly costly disease states. This is accomplished through the proprietary technology, which is intended to identify and measure the severity of high/low stratification of the sickness level based upon evidence-based clinical and medical rules and delivers best-of-breed tools to insurance companies, doctors, hospitals, and employers.


2. Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the year ended December 31, 2012, the Company has had no revenue since inception and had a net loss of $5,113,584 in 2012 and an accumulated deficit of $5,289,665 during the development stage. As of December 31, 2012, the Company has not emerged from the development stage. In view of these matters, the Company's ability to continue as a going concern is dependent upon the Company's ability to begin operations and to achieve a level of profitability. The Company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities with some additional funding from other traditional financing sources, including term notes until such time that funds provided by operations are sufficient to fund working capital requirements. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.
 

3. Significant Accounting Policies
 
USE OF ESTIMATES - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS - All cash, other than held in escrow, is maintained with a major financial institution in the United States. Deposits with this bank may exceed the amount of insurance provided on such deposits.  Temporary cash investments with an original maturity of three months or less are considered to be cash equivalents. The company does not have cash equivalents as of December 31, 2011 and 2012.

RESEARCH AND DEVELOPMENT EXPENSES - Expenditures for research, development, and engineering of products are expensed as incurred.

COMMON STOCK - The Company records common stock issuances when all of the legal requirements for the issuance of such common stock have been satisfied.

REVENUE AND COST RECOGNITION - The Company has no current source of revenue; therefore the Company has not yet adopted any policy regarding the
recognition of revenue or cost.