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                                                                    Exhibit 99.1


Fellow Stockholders:

2000 was a tumultuous year for Medinex Systems, Inc. Like many Nasdaq companies,
our stock price suffered as equity markets recorded one of their worst years in
history. By the end of the year, our stock price had dropped 90 percent and our
working capital had dwindled to dangerously low levels. With capital markets
tightening and Wall Street focused on nearer term profitability for start-up
companies, we re-evaluated and refocused our corporate strategy.

In 1999, benefiting from then-strong capital markets and a recently completed
Initial Public Offering, the Company embarked on a rapid expansion plan that
included 10 acquisitions. By the end of 1999 we were setting revenue growth
records and were rapidly releasing new products. However, that growth required
substantial infusions of both cash and human resources. As mid-2000 approached,
it became clear that we needed to direct our increasingly scarce resources to
our most promising products and markets. Reflecting our focus on and commitment
to the rapidly developing healthcare technology market, we renamed the Company
Medinex Systems, Inc. in July of 2000.

eHealthcare Information Management

In the short time since we started our Company, massive changes in healthcare
technology have steadily increased. Never before in our history have we seen
healthcare undergo such rapid change and improvement due to technology.

From the development of new drugs and drug delivery systems to MRIs, laser
surgery and heart pacemakers, advances in technology have led to phenomenal
advances in the quality and effectiveness of medical care.

Compared to these and other advances in the practice of medicine itself, the
application of technology to the information processing needs of healthcare
delivery is in its infancy. Remarkably, the vast majority of medical record data
in this country is still managed on paper. Fax machines, mail and courier
services are jammed with paper-based medical records and prescriptions being
transferred between clinics, labs, hospitals, doctors and patients.

In November of 2000, the federal government released rules implementing the
Health Insurance Portability and Accountability Act (HIPAA). This controversial
legislation has far-reaching implications that will drive the use of electronic
information in healthcare. HIPAA requires improved efficiency in healthcare by
standardizing electronic data interchange and protecting the confidentiality and
security of healthcare data. Compliance with the system, applicable to all
healthcare providers, will require sweeping changes in most healthcare
transaction and administrative systems.

Technologies are now being created to improve many areas of healthcare,
including clinical activity, medical records, insurance processing and others.
The promise of these new healthcare technologies is far-reaching -pharmaceutical
companies can get better drug trial data from electronic medical record
databases; insurance companies can process claims more efficiently; and doctors
can benefit from improved research and clinical data analysis of patient
information. We have worked hard to make sure that Medinex is positioned to
benefit from this amazing revolution.
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Medinex Office, our Internet-based practice management system, is designed to be
at the core of this information management revolution. Whether in a doctor's
office, clinic or hospital, our system is designed to be the central repository
of information - the database with which other clinical and insurance-related
technologies are integrated. We also have developed Web-based tools to help
healthcare professionals, insurance companies, suppliers and patients
communicate electronically in a secure HIPAA-compliant manner.

Product Strategy

Medinex's strategy is to capitalize on opportunities in the rapidly evolving
electronic healthcare marketplace. Medinex Office is the cornerstone of our
product strategy. This state-of-the-art software product, written in JAVA,
provides comprehensive office-management functions including scheduling, claims
processing, billing, and medical records management.

Since the software runs both in the health practitioner's office and on the
Internet, it can be accessed 24 hours a day from anywhere in the world. Our
configuration provides the highest level of data security and reliability to
healthcare professionals. Doctors can access medical records and schedules from
home, branch offices, hospitals and medical clinics. Redundant servers in our
data center automatically back up their critical data.

An important component of our Medinex Office solution is our new MxSecure
Messaging product. The system makes it very easy for healthcare professionals to
send and receive encrypted messages (e-mail, medical records, lab results) using
their existing e-mail accounts. It also enables convenient, secure and HIPAA-
compliant doctor-to-patient e-mail communication. Finally, patients and
healthcare professionals can enjoy the enormous benefits of efficient e-mail
communication while ensuring the patient's privacy.

To date, our top line revenues have been produced by our Pinnacle MedSource and
MedMarket.com operations. Pinnacle MedSource, headquartered near Atlanta,
Georgia, is now selling more than 1,000 different products using traditional
distribution, as well as online through our network of Web sites. This online
ordering system is integrated with our Medinex Office system. In the future, the
software will track users' consumption of medical supplies and will have the
ability to automatically reorder from Pinnacle MedSource.

In the year 2000, our client base at MedMarket.com grew dramatically, from 350
to more than 700 medical equipment manufacturers, distributors and service
providers. MedMarket has helped build our Medinex brand and gives us a high-
profile position in the evolving online medical marketplace. For example,
throughout most of the year, MedMarket.com maintained a top ten rating at the
AOL search engine for the search term "medical supplies."
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Going forward, however, it is the widespread distribution and implementation of
Medinex Office software that will drive our growth. Today, we have a handful of
physician's office beta test sites that have proven enormously helpful. We
expect to begin implementation of Medinex Office in selected large-scale
healthcare provider organizations later this year.

Building the Future Together

Medinex has taken a collaborative approach to penetrating this new healthcare
technology market. We are building a nationwide network of distribution partners
and Value Added Resellers (VARs) to market our products. We have developed a
version of our Medinex Office product specifically to meet the technology and
business needs of the medical software VAR market. Also, Medinex is one of seven
founding members of the Community Health Information Consortium. Other founding
members of the Consortium include Compaq Healthcare Solutions Group, Hitachi
Healthcare Solutions Group and Oracle. The goal of the Consortium is to bring
technology vendors together to assist local healthcare professionals in creating
systems to reduce administrative and clinical costs. The Consortium promises to
be a national leader in promoting greater use of members' products within large
healthcare organizations.

2000 Operating Results

Revenues increased from $0.7 million in 1999 to $4.6 million in 2000, but losses
mounted. Early on in the year, it became clear we would have to make
adjustments. Votenet, our public policy and political division, was expanding
rapidly but losses were increasing. As a result, we made the decision to focus
our efforts on healthcare technology - a much larger market that provides the
Company with greater opportunity and that better reflects our core competency.
Throughout the year, we worked to divest the Company of the Votenet division. In
February of 2001, we sold our Votenet assets in a transaction that improved our
working capital and completed our transition to a company completely focused on
healthcare technology.

In July, we began cutting back operations and concentrating our efforts on the
products that we felt offered the best combination of growth and profitability.
As payroll was our greatest expense, we needed to reduce costs by eliminating
jobs. This was a tough choice to make, but we needed to move quickly to improve
our vitality and to weather the storm on the horizon. By the end of the year, we
had dropped from a peak staff of more than 180 in July to 83 employees. The
subsequent sale of Votenet in February 2001 has left the Company with 35
employees, resulting in a substantially lower overhead burden. Most importantly,
however, we now have a robust, elegant software product - fully developed and
ready for widespread implementation. This product is being supported by a
healthy and growing medical distribution business.

When I wrote you last year, I said that our goal was to generate positive EBITDA
(earnings before interest, taxes, depreciation and amortization) during 2001.
That is still our goal. We see the achievement of this objective as the most
important next step in the development of the Company. We've also established
objectives for the ongoing expansion of our distribution network and users of
our Medinex Office software. An increased number of distributors and clients for
Pinnacle MedSource, MedMarket and Medinex Office are the critical metrics we've
established as priorities in 2001.
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I would like to welcome several important new members to our team: Colin
Christie as Chief Operating Officer; Kelly Prior as Chief Financial Officer; and
Board members Dr. Robert Gober and R. Scot Haug. These individuals bring a depth
of experience in high tech, finance, and healthcare to our Company. We are
fortunate to have attracted such great talent and I look forward to the
contributions they will make to our future success. My thanks to outgoing Board
members Drew Wahlin and Doug Carnahan. Their contribution has been invaluable in
these early formative years.

Finally, I would like to take the opportunity to acknowledge the employees who
have made great contributions to the Company's progress. We have a talented,
dedicated and highly motivated team that is working hard to make Medinex a
leader in the coming healthcare technology revolution. They are working for you,
carving out an opportunity where one of the world's largest marketplaces,
healthcare, meets the greatest technology movement in its history.

Anthony J. Paquin
Chairman